These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks highlights its Earnings ESP (Expected Surprise Prediction) tool, which identifies stocks likely to exceed earnings estimates by comparing the Most Accurate Estimate to the Zacks Consensus Estimate. Historically, combining a positive ESP with a Zacks Rank #3 (Hold) or better has resulted in positive earnings surprises 70% of the time, yielding an average annual return of 28.3% over a 10-year backtest. The article points to Tenet Healthcare (THC) with a +2.45% ESP and Aquestive Therapeutics (AQST) with a +5.56% ESP as current medical sector examples potentially poised for positive earnings surprises, suggesting opportunities for investors to capitalize on pre-earnings movements.

Analysis

The Zacks Earnings Expected Surprise Prediction (ESP) model identifies Tenet Healthcare (THC) and Aquestive Therapeutics (AQST) as having a heightened probability of delivering a positive earnings surprise in their upcoming quarterly reports. According to the methodology's 10-year backtest, combining a positive ESP with a Zacks Rank of #3 (Hold) or better has historically led to a positive surprise 70% of the time, generating average annual returns of 28.3%. Both companies fit this criterion with a #3 (Hold) rating. Specifically, Tenet Healthcare exhibits a +2.45% ESP, derived from a Most Accurate Estimate of $2.91 per share versus a consensus of $2.84, with its report due on July 22, 2025. Similarly, Aquestive Therapeutics shows a more pronounced ESP of +5.56%, with its Most Accurate Estimate at -$0.17 per share compared to a consensus of -$0.18 ahead of its August 5, 2025 report. These quantitative signals suggest that the most recent analyst revisions for both medical stocks are trending more favorably than the broader consensus, pointing to a potential catalyst for near-term stock price movement.

Key Decisions for Investors

• Investors focused on event-driven strategies should consider Tenet Healthcare and Aquestive Therapeutics for potential short-term trades ahead of their earnings, as their positive ESP figures signal a statistical likelihood of beating market expectations.
• While the positive ESP is a bullish indicator, the Zacks #3 (Hold) rank for both THC and AQST suggests they are expected to perform in-line with the market, meaning investors should weigh the potential for a modest earnings beat against the inherent risk of an earnings-related sell-off.
• Monitor analyst estimate revisions for both companies closely in the final weeks before their respective July 22 and August 5 reporting dates, as any change to the Most Accurate Estimate will directly impact the ESP and the validity of this short-term thesis.