These 2 Retail and Wholesale Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks highlights its proprietary Earnings ESP (Expected Surprise Prediction) methodology, which combines the most accurate analyst estimate with the Zacks Consensus Estimate and a Zacks Rank of #3 or better to identify potential earnings surprises. This approach has historically predicted positive earnings surprises 70% of the time and generated 28.3% average annual returns over a decade. The firm identifies Carvana (CVNA) with a +12.34% ESP and Deckers (DECK) with a +1.85% ESP as two retail and wholesale stocks positioned for potential earnings beats in their upcoming reports, suggesting short-term trading opportunities based on these metrics.

Analysis

The Zacks Earnings ESP (Expected Surprise Prediction) model identifies Carvana (CVNA) and Deckers (DECK) as potential candidates for positive earnings surprises in their upcoming quarterly reports. The proprietary model, which has historically predicted earnings beats 70% of the time when combining a positive ESP with a Zacks Rank of #3 (Hold) or better, is based on the premise that the most recent analyst estimates are the most informed. For Carvana, a Zacks Rank #3 (Hold) stock, the model highlights a significant +12.34% ESP, derived from a Most Accurate Estimate of $1.45 per share versus a consensus estimate of $1.29. Deckers, which holds a stronger Zacks Rank #2 (Buy), has a more modest ESP of +1.85%, with a Most Accurate Estimate of $1.60 against a consensus of $1.57. The analysis suggests that both retail/wholesale stocks are positioned for potential upside catalysts tied to their earnings releases scheduled for late October 2025.

Key Decisions for Investors

• Investors focused on event-driven strategies could consider tactical long positions in CVNA and DECK ahead of their upcoming earnings reports to capitalize on the potential for a positive surprise as identified by the quantitative model.
• When comparing the two, DECK may represent a more fundamentally sound play given its stronger Zacks Rank #2 (Buy), whereas CVNA's significantly higher ESP of +12.34% suggests a greater magnitude of potential surprise, albeit with a neutral Rank #3 (Hold).
• It is critical to acknowledge that this thesis is predicated on a model's historical backtest; an earnings beat does not guarantee a positive share price reaction, and any position should be sized appropriately for a speculative, short-term trade.