Why They Should Be on Your Radar

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.

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.

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. ServiceNow (NOW) earns a Zacks Rank #3 26 days from its next quarterly earnings release on July 23, 2025, and its Most Accurate Estimate comes in at $3.61 a share.

By taking the percentage difference between the $3.61 Most Accurate Estimate and the $3.54 Zacks Consensus Estimate, ServiceNow has an Earnings ESP of 2.11%.

NOW is just one of a large group of Computer and Technology stocks with a positive ESP figure. Dynatrace (DT) is another qualifying stock you may want to consider.

Dynatrace, which is readying to report earnings on August 6, 2025, sits at a Zacks Rank #2 (Buy) right now. It’s Most Accurate Estimate is currently $0.38 a share, and DT is 40 days out from its next earnings report.

For Dynatrace, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.38 is 1.33%.

NOW and DT’s positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ServiceNow, Inc. (NOW) : Free Stock Analysis Report

Dynatrace, Inc. (DT) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research