Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
The final step today is to look at a stock that meets our ESP qualifications. Cracker Barrel Old Country Store (CBRL) earns a #3 (Hold) 30 days from its next quarterly earnings release on September 16, 2026, and its Most Accurate Estimate comes in at $0.28 a share.
By taking the percentage difference between the $0.28 Most Accurate Estimate and the $0.12 Zacks Consensus Estimate, Cracker Barrel Old Country Store has an Earnings ESP of +133.33%. Investors should also know that CBRL is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
CBRL is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Brinker International (EAT).
Brinker International is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on November 4, 2026. EAT's Most Accurate Estimate sits at $2.35 a share 79 days from its next earnings release.
For Brinker International, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.21 is +6.11%.
CBRL and EAT's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
Before you invest in Cracker Barrel Old Country Store, Inc. (CBRL), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.
Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)
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Originally published on zacks.com, part of the BLOX Digital Content Exchange.
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