Two factors often determine stock prices in the long run: earnings and interest rates. Investors can’t control the latter, but they can focus on a company’s earnings results every quarter.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company’s report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Twilio (TWLO) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $1.04 a share 27 days away from its upcoming earnings release on August 7, 2025.
By taking the percentage difference between the $1.04 Most Accurate Estimate and the $1.02 Zacks Consensus Estimate, Twilio has an Earnings ESP of +1.76%.
TWLO is just one of a large group of Computer and Technology stocks with a positive ESP figure. Badger Meter (BMI) is another qualifying stock you may want to consider.
Badger Meter, which is readying to report earnings on July 22, 2025, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $1.28 a share, and BMI is 11 days out from its next earnings report.
The Zacks Consensus Estimate for Badger Meter is $1.21, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +5.61%.
TWLO and BMI’s positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they’re reported for profitable earnings season trading. Check it out here >>
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