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.

The earnings figure itself is key, 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 even higher.

2 Stocks to Add to Your Watchlist

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 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.

The final step today is to look at a stock that meets our ESP qualifications. Cummins (CMI) earns a Zacks Rank #3 12 days from its next quarterly earnings release on November 5, 2024, and its Most Accurate Estimate comes in at $5.08 a share.

CMI has an Earnings ESP figure of 3.91%, which, as explained above, is calculated by taking the percentage difference between the $5.08 Most Accurate Estimate and the Zacks Consensus Estimate of $4.89.

CMI is part of a big group of Auto-Tires-Trucks stocks that boast a positive ESP, and investors may want to take a look at General Motors (GM) as well.

Slated to report earnings on February 4, 2025, General Motors holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.76 a share 103 days from its next quarterly update.

For General Motors, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.66 is 6.3%.

Because both stocks hold a positive Earnings ESP, CMI and GM 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 >>

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Cummins Inc. (CMI) : Free Stock Analysis Report

General Motors Company (GM) : Free Stock Analysis Report