Why Advanced Micro (AMD) Could Beat Earnings Estimates Again

If you’re looking for a stock with a solid history of beating earnings estimates and is in a good position to maintain the movement in the next quarterly report of its, you ought to think about Advanced Micro Devices (AMD). This company, and that is in the Zacks Electronics – Semiconductors industry, shows ability for another earnings beat.

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

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

Cost and EPS Surprise

Thanks in part to this history, there continues to be a favorable change in earnings estimates for Advanced Micro lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is actually positive, which is an excellent indicator of an earnings beat, mainly when matched with its strong Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP & a Zacks Rank #3 (Hold) or better produce a good surprise about 70 % of the moment. In other words, in case you have ten 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 a version of the Zacks Consensus whose description is related to change. The concept here is that analysts revising their estimates straightaway before an earnings release contain the latest information, which could likely become more accurate than what they and others bringing about the consensus had predicted earlier.

Advanced Micro has an Earnings ESP of +3.23 % at the second, hinting that analysts have developed bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is probably nearby.

Whenever the Earnings ESP comes up unfavorable, investors must note this will decrease the predictive power of the metric. But, a bad value is not signs of a stock’s earnings miss.

Many companies wind up beating the consensus EPS estimate, but that may not be the sole foundation for their stocks moving higher. On the other hand, some stocks may hold their ground even in case they wind up missing the consensus estimate.

Due to this, it is really crucial that you check a company’s Earnings ESP ahead of its quarterly discharge to increase the likelihood of success. Make sure to utilize our Earnings ESP Filter to uncover the very best stocks to invest in or advertise before they’ve reported.

Leave a Reply

Your email address will not be published. Required fields are marked *