Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
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.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 Burlington Stores?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Burlington Stores (BURL) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.73 a share, just 22 days from its upcoming earnings release on November 24, 2026.
By taking the percentage difference between the $1.73 Most Accurate Estimate and the $1.71 Zacks Consensus Estimate, Burlington Stores has an Earnings ESP of +1.19%. Investors should also know that BURL 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.
BURL is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Cracker Barrel Old Country Store (CBRL) as well.
Cracker Barrel Old Country Store, which is readying to report earnings on December 8, 2026, sits at a Zacks Rank #1 (Strong Buy) right now. Its Most Accurate Estimate is currently $0.02 a share, and CBRL is 36 days out from its next earnings report.
For Cracker Barrel Old Country Store, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.00 is +350.01%.
BURL and CBRL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>
Should You Invest in Burlington Stores, Inc. (BURL)?
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Burlington Stores, Inc. (BURL): Free Stock Analysis Report
Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).