Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.

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, Explained

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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.

Should You Consider MGM Resorts?

The final step today is to look at a stock that meets our ESP qualifications. MGM Resorts (MGM Quick QuoteMGM - Free Report) earns a #3 (Hold) 14 days from its next quarterly earnings release on April 30, 2025, and its Most Accurate Estimate comes in at $0.61 a share.

MGM Resorts' Earnings ESP sits at +13.54%, which, as explained above, is calculated by taking the percentage difference between the $0.61 Most Accurate Estimate and the Zacks Consensus Estimate of $0.54. MGM is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

MGM is just one of a large group of Consumer Discretionary stocks with a positive ESP figure. Roblox (RBLX Quick QuoteRBLX - Free Report) is another qualifying stock you may want to consider.

Roblox is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on May 1, 2025. RBLX's Most Accurate Estimate sits at -$0.38 a share 15 days from its next earnings release.

For Roblox, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.41 is +7.01%.

Because both stocks hold a positive Earnings ESP, MGM and RBLX could potentially post earnings beats in their next reports.

Find Stocks to Buy or Sell Before They're Reported

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 >>