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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive 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, 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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Agnico Eagle Mines?
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. Agnico Eagle Mines (AEM) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $3.18 a share, just 30 days from its upcoming earnings release on July 29, 2026.
Agnico Eagle Mines' Earnings ESP sits at +1.27%, which, as explained above, is calculated by taking the percentage difference between the $3.18 Most Accurate Estimate and the Zacks Consensus Estimate of $3.14. AEM 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.
AEM is one of just a large database of Basic Materials stocks with positive ESPs. Another solid-looking stock is SSR Mining (SSRM).
Slated to report earnings on August 4, 2026, SSR Mining holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $0.81 a share 36 days from its next quarterly update.
SSR Mining's Earnings ESP figure currently stands at +8.73% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.75.
AEM and SSRM'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 Agnico Eagle Mines Limited (AEM)?
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Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report
Silver Standard Resources Inc. (SSRM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).