Chicago, IL – November 20, 2024 – Stocks in this week’s article are Amazon.com AMZN, Maplebear Inc. CART, Exelixis EXEL and Doximity DOCS.
Hunting for Earnings Beats? Try These 4 Top-Ranked Stocks
It is not surprising that before any earnings season, every investor looks for stocks that can beat market expectations. This is because investors always try to position themselves ahead of time and look to tap stocks that are of high quality.
In this regard, we ran a screener that yielded stocks Amazon.com, Maplebear Inc., Exelixis and Doximity as the likely winners on the earnings beat potential.
Why Is a Positive Earnings Surprise So Important?
Historically, stocks of companies with solid quarterly earnings (on a nominal basis) tank if they miss or merely meet market expectations. After all, a 20% earnings rise (though apparently looks good) doesn’t tell you if earnings growth has been exhibiting a decelerating trend.
Also, seasonal fluctuations come into play sometimes. If a company’s Q1 is seasonally weak and Q4 strong, then it is likely to report a sequential earnings decline. In such cases, growth rates are misleading while judging the true health of a company.
On the other hand, after much brainstorming and analysis of companies’ financials and initiatives, Wall Street analysts project earnings of companies. They in fact club their insights and a company’s guidance when deriving an earnings estimate.
Thus, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as the market perception. And if the margin of earnings surprise is big, it typically drives the stock higher right after the release. Thus, more than anything else, an earnings surprise can push a stock higher.
How to Find Stocks that Can Beat?
Now, finding stocks that have the potential to beat on the bottom line may be investors’ dream but not an easy job. One way to do this is to look at the earnings surprise history of the company.
An impressive track in this regard generally acts as a catalyst in sending a stock higher. It indicates the company’s ability to surpass estimates. And investors generally believe that the company will apply the same secret sauce to execute yet another earning beat in its next release.
Here are four out of 20 stocks:
Amazon.com:The Zacks Rank #1 company is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. You can see the complete list of today’s Zacks #1 Rank stocks here.
The average earnings surprise of AMZN for the past four quarters is 25.85%.
Maplebear: Maplebear Inc. is a grocery technology company principally in North America that works with grocers and retailers to transform how people shop. The FTNT stock has a Zacks Rank #2.
The average earnings surprise of CART for the past four quarters is 442.44%.
Exelixis: The Zacks Rank #2 company is an oncology-focused biotechnology company that primarily focuses on the discovery, development and commercialization of new drugs for the treatment of difficult-to-treat cancers.
The average earnings surprise of EXEL for the past four quarters is 26.52%.
Doximity: Doximity Inc. provides a digital platform for medical professionals. The company's network members include physicians across all specialties and practice areas.The stock has a Zacks Rank #1.
The average earnings surprise of DOCS for the past four quarters is 22.12%.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2371934/looking-for-earnings-beat-buy-these-4-top-ranked-stocks
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