Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

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.

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. Qualcomm (QCOM) earns a Zacks Rank #2 two days from its next quarterly earnings release on November 6, 2024, and its Most Accurate Estimate comes in at $2.57 a share.

Qualcomm's Earnings ESP sits at 0.48%, which, as explained above, is calculated by taking the percentage difference between the $2.57 Most Accurate Estimate and the Zacks Consensus Estimate of $2.56.

QCOM is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at Seagate (STX) as well.

Seagate, which is readying to report earnings on January 22, 2025, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $1.90 a share, and STX is 79 days out from its next earnings report.

For Seagate, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.78 is 6.64%.

QCOM and STX's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

Seagate Technology Holdings PLC (STX) : Free Stock Analysis Report