Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Computer and Technology Names

Zacks Investment Research promotes its Earnings ESP (Expected Surprise Prediction) tool, which identifies stocks likely to beat earnings estimates by comparing the Most Accurate Estimate to the Zacks Consensus Estimate. Backtested data indicates that combining a positive ESP with a Zacks Rank #3 (Hold) or better yields a 70% probability of a positive earnings surprise and has generated average annual returns of 28.3% over a decade. The article highlights Paycom Software (PAYC) and Monday.com (MNDY) as current examples with positive ESPs, suggesting potential earnings beats. This methodology offers a data-driven approach for investors aiming to capitalize on earnings season volatility and identify outperforming assets, building on the broader Zacks Rank system's historical outperformance of the S&P 500 by over 24% annually since 1988.

Analysis

Paycom Software (PAYC) and Monday.com (MNDY) are highlighted as potential candidates for a positive earnings surprise based on the Zacks Earnings ESP (Expected Surprise Prediction) model. This quantitative screen identifies stocks where the 'Most Accurate Estimate' from analysts is higher than the broader 'Zacks Consensus Estimate'. For PAYC, the ESP is a modest +0.98%, with its Most Accurate Estimate at $1.80 per share versus a consensus of $1.78 ahead of its July 30, 2025 report. Monday.com exhibits a more significant signal with an ESP of +4.88%, driven by a Most Accurate Estimate of $0.88 against a consensus of $0.84 for its August 11, 2025 report. While the model's backtest suggests a 70% probability of an earnings beat for stocks meeting these criteria, it is critical to note that both PAYC and MNDY carry a Zacks Rank of #3 (Hold). This neutral rating implies an expectation of in-line market performance, suggesting the positive ESP signal is a specific, short-term indicator rather than a broad endorsement of the companies' long-term fundamentals. The per-ticker sentiment scores (PAYC: 0.4, MNDY: 0.5) are only marginally positive, reinforcing that the bullish case is narrowly focused on the upcoming earnings event.

Key Decisions for Investors

• Investors seeking event-driven opportunities may consider the positive Earnings ESP for PAYC and MNDY as a signal for a potential short-term upside catalyst around their upcoming earnings reports.
• Given both stocks have a neutral #3 (Hold) rank, any position should be considered tactical, as the model's core rating does not signal long-term outperformance relative to the market.
• For those choosing between the two, Monday.com's significantly higher ESP of +4.88% may represent a stronger conviction signal for an earnings beat compared to Paycom's +0.98%.
• This analysis is based on a single quantitative factor; it is crucial to supplement this signal with a broader review of fundamentals, valuation, and technicals before initiating a position.