Why Investors Need to Take Advantage of These 2 Finance Stocks Now

Zacks is promoting its Earnings ESP (Expected Surprise Prediction) tool, designed to identify stocks likely to beat earnings estimates by comparing the Most Accurate Estimate (latest analyst revision) against the Zacks Consensus Estimate. The firm states that combining a positive ESP with a Zacks Rank #3 (Hold) or stronger has historically led to positive bottom-line surprises 70% of the time, with a 10-year backtest showing average annual returns of 28%. Two finance stocks, Skyward Specialty Insurance (SKWD) with a +3.79% ESP and Palomar (PLMR) with a +13.70% ESP, both holding a Zacks Rank #3, are highlighted as having a strong probability of exceeding upcoming earnings expectations.

Analysis

The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) tool as a method to identify stocks likely to exceed quarterly earnings estimates. This proprietary system compares the Most Accurate Estimate (latest analyst revision) against the Zacks Consensus Estimate, with a positive percentage difference indicating potential upside. Historically, combining a positive ESP with a Zacks Rank #3 (Hold) or stronger has resulted in a positive bottom-line surprise 70% of the time, with a 10-year backtest showing average annual returns of 28%.

Two finance sector stocks are presented as current examples: Skyward Specialty Insurance (SKWD) and Palomar (PLMR). SKWD, currently holding a Zacks Rank #3, exhibits a +3.79% ESP, derived from a Most Accurate Estimate of $0.86 against a consensus of $0.83, ahead of its November 4, 2025, earnings release. Similarly, PLMR, also with a Zacks Rank #3, shows a significant +13.70% ESP, based on a Most Accurate Estimate of $1.76 versus a consensus of $1.55, with earnings due on November 3, 2025.

These positive ESP figures for both SKWD and PLMR suggest a strong statistical probability of beating analyst expectations in their upcoming reports, aligning with the tool's historical performance. The optimistic sentiment surrounding these specific stock picks, as indicated by the general and per-ticker sentiment scores, underscores the potential for near-term price movements driven by earnings surprises.

Key Decisions for Investors

• Consider Skyward Specialty Insurance (SKWD) and Palomar (PLMR) for potential short-term trading opportunities given their strong positive Earnings ESPs and upcoming earnings reports.
• Evaluate the historical efficacy of the Zacks Earnings ESP tool, noting its claimed 70% success rate for positive surprises and 28% average annual returns when combined with a Zacks Rank #3 or stronger.
• Monitor the actual earnings outcomes for SKWD on November 4, 2025, and PLMR on November 3, 2025, to assess the accuracy of these predictions and potential market reactions.