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

The article highlights Zacks' Earnings ESP (Expected Surprise Prediction) tool, designed to identify stocks likely to beat quarterly earnings estimates by comparing the Most Accurate Estimate to the Zacks Consensus Estimate. Historically, a positive ESP combined with a Zacks Rank of #3 (Hold) or stronger has resulted in positive bottom-line surprises 70% of the time, generating an average 28% annual return over a 10-year backtest. Humana (HUM) and Inspire Medical Systems (INSP) are presented as current medical sector examples with significant positive ESPs, suggesting a high probability of outperforming analyst expectations in their upcoming earnings reports.

Analysis

Two medical sector stocks, Humana (HUM) and Inspire Medical Systems (INSP), have been identified as having a high probability of delivering a positive earnings surprise in their upcoming quarterly reports. This assessment is based on the Zacks Earnings Expected Surprise Prediction (ESP) model, which combines a positive ESP figure with a Zacks Rank of #3 (Hold) or better. Historically, this methodology has correctly predicted positive bottom-line surprises 70% of the time, yielding an average annual return of approximately 28% in a 10-year backtest. Humana exhibits a particularly strong signal, with a positive ESP of +31.03% ahead of its July 30, 2025 report, stemming from a Most Accurate Estimate of $8.28 per share versus a consensus of $6.32. Inspire Medical Systems also shows a positive signal with an ESP of +9.09% for its August 4, 2025 report, based on a Most Accurate Estimate of $0.24 against a consensus of $0.22. Both companies currently hold a Zacks Rank of #3 (Hold), suggesting they are expected to perform in line with the market, but the positive ESPs flag them as potential short-term outperformers based on this specific earnings catalyst.

Key Decisions for Investors

• Investors may consider tactical, pre-earnings positions in Humana and Inspire Medical Systems, as both are flagged by a quantitative model with a 70% historical success rate for predicting positive earnings surprises.
• Given its significantly higher Earnings ESP of +31.03% compared to INSP's +9.09%, Humana presents a stronger signal for a potential earnings beat, warranting closer attention for those employing an event-driven strategy.
• While the ESP model points to a likely positive surprise, investors should note that both companies carry a neutral #3 (Hold) rank, suggesting that any position should be monitored closely around the earnings release and may not reflect a long-term fundamental buy recommendation based on this data alone.