Precisely why Advanced Micro (AMD) Could Beat Earnings Estimates Again

By | January 11, 2021

If you are looking for a stock that has a great history of beating earnings estimates and is in an excellent place to sustain the movement in the next quarterly report of its, you ought to consider Advanced Micro Devices (AMD). This business, which happens to be in the Zacks Electronics – Semiconductors business, shows potential for another earnings beat.

This particular chipmaker has an established record of topping earnings estimates, especially when looking at the prior 2 reports. The company boasts an average surprise in the past two quarters of 13.19 %.

For the most recent quarter, Advanced Micro was anticipated to submit earnings of $0.36 per share, but it reported $0.41 per share instead, representing a surprise of 13.89 %. For the preceding quarter, the consensus estimation was $0.16 per AMD share, while it actually produced $0.18 per share, a surprise of 12.50 %.

Cost and EPS Surprise

Thanks in part to this past, there has been a favorable change in earnings estimates for Advanced Micro lately. In truth, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is actually good, which is a good indicator of an earnings beat, mainly when matched with its solid Zacks Rank.

The research of ours shows that stocks with the combination of an optimistic Earnings ESP and a Zacks Rank #3 (Hold) or perhaps better make a positive surprise nearly 70 % of the moment. Quite simply, if you’ve 10 stocks with this combination, the amount of stocks that outdo the consensus estimate might be as high as 7.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is actually a version of the Zacks Consensus whose description is actually related to change. The idea here is that analysts revising the estimates of theirs directly before an earnings release hold the latest information, which might potentially become more accurate than what they and some leading to the consensus had predicted earlier.

Advanced Micro has an Earnings ESP of +3.23 % at the moment, suggesting that analysts have developed bullish on its near-term earnings possibilities. Once you incorporate this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is possibly nearby.

If ever the Earnings ESP comes up negative, investors should be aware this will decrease the predictive power of the metric. Nonetheless, a bad value just isn’t signs of a stock’s earnings miss.

Many companies wind up beating the consensus EPS estimate, but that is quite possibly not the sole foundation for their stocks moving higher. On the other hand, several stocks may hold the ground of theirs even if they end up missing the consensus estimate.

Because of this particular, it’s seriously crucial that you check a company’s Earnings ESP in advance of its quarterly release to raise the chances of success. Make sure to use our Earnings ESP Filter to uncover the most effective stocks to invest in as well as sell before they have reported.