Zacks is promoting its Earnings ESP (Expected Surprise Prediction) tool, designed to forecast earnings surprises by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, factoring in the Zacks Rank. This methodology, when combined with a Zacks Rank #3 (Hold) or stronger, has historically predicted positive bottom-line surprises 70% of the time, generating average annual returns of 28% over a 10-year backtest. The article highlights Incyte (INCY) and Natera (NTRA) as current examples with positive ESPs, suggesting they are positioned to exceed upcoming earnings estimates.
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ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. If you wish to go to ZacksTrade, click OK. If you do not, click Cancel. These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar Read MoreHide Full Article Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings. 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. Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter. The Zacks Earnings ESP, Explained The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price. When we join a positive earnings ESP with a Zacks Rank 3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest. Stocks with a ranking of 3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of 2 (Buy) and 1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank. Should You Consider Incyte? 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 quickly look at a qualifying stock. Incyte (INCY - Free Report) holds a 2 (Buy) at the moment and its Most Accurate Estimate comes in at $1.85 a share 29 days away from its upcoming earnings release on November 4, 2025. INCY has an Earnings ESP figure of +11.90%, which, as explained above, is calculated by taking the percentage difference between the $1.85 Most Accurate Estimate and the Zacks Consensus Estimate of $1.65. Incyte is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. INCY is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Natera (NTRA - Free Report) . Natera is a Zacks Rank 3 (Hold) stock, and is getting ready to report earnings on November 11, 2025. NTRA's Most Accurate Estimate sits at -$0.39 a share 36 days from its next earnings release. The Zacks Consensus Estimate for Natera is -$0.40, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.27%. Because both stocks hold a positive Earnings ESP, INCY and NTRA could potentially post earnings beats in their next reports. Find Stocks to Buy or Sell Before They're Reported 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 >> Should You Invest in Incyte Corporation (INCY)? Before you invest in Incyte Corporation (INCY), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy. Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.) See More Zacks Research for These Tickers Normally $25 each - click below to receive one report FREE: Image: Bigstock These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings. 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. Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter. The Zacks Earnings ESP, Explained The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price. When we join a positive earnings ESP with a Zacks Rank 3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest. Stocks with a ranking of 3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of 2 (Buy) and 1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank. Should You Consider Incyte? 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 quickly look at a qualifying stock. Incyte (INCY - Free Report) holds a 2 (Buy) at the moment and its Most Accurate Estimate comes in at $1.85 a share 29 days away from its upcoming earnings release on November 4, 2025.INCY has an Earnings ESP figure of +11.90%, which, as explained above, is calculated by taking the percentage difference between the $1.85 Most Accurate Estimate and the Zacks Consensus Estimate of $1.65. Incyte is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. INCY is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Natera (NTRA - Free Report) . Natera is a Zacks Rank 3 (Hold) stock, and is getting ready to report earnings on November 11, 2025. NTRA's Most Accurate Estimate sits at -$0.39 a share 36 days from its next earnings release. The Zacks Consensus Estimate for Natera is -$0.40, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.27%. Because both stocks hold a positive Earnings ESP, INCY and NTRA could potentially post earnings beats in their next reports. Find Stocks to Buy or Sell Before They're Reported 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 >>Should You Invest in Incyte Corporation (INCY)? Before you invest in Incyte Corporation (INCY), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy. Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.) The analysis highlights a quantitative strategy, the Zacks Earnings ESP (Expected Surprise Prediction), which aims to identify companies likely to exceed earnings expectations. This model, which combines a positive ESP with a Zacks Rank of 3 (Hold) or better, has historically predicted positive earnings surprises 70% of the time, with a 10-year backtest showing average annual returns of 28%. Two medical sector stocks are presented as current examples of this signal. Incyte (INCY), with a Zacks Rank 2 (Buy), exhibits a strong positive signal with an Earnings ESP of +11.90%, derived from a Most Accurate Estimate of $1.85 versus a consensus of $1.65 ahead of its November 4 earnings. Natera (NTRA) presents a weaker, yet still positive, signal; it holds a Zacks Rank 3 (Hold) and has an ESP of +1.27% based on a Most Accurate Estimate of -$0.39 compared to a -$0.40 consensus. The data suggests both companies are positioned for a potential bottom-line beat, with the quantitative indicators for Incyte being significantly more pronounced.
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