Advanced Micro Devices Poised for Earnings Success Ahead
If you’re seeking a stock with a strong track record of exceeding earnings estimates, Advanced Micro Devices (AMD) stands out. As part of the Zacks Computer – Integrated Systems industry, AMD appears well-positioned for another positive earnings report.
Recent Performance and Earnings History
AMD has demonstrated a solid streak of beating earnings estimates in its last two reports, averaging a surprise of 1.48%. In the most recent quarter, AMD reported earnings of $1.09 per share, slightly exceeding the Zacks Consensus Estimate of $1.07 per share, yielding a surprise of 1.87%. For the previous quarter, AMD’s expected earnings were $0.91 per share, but it achieved $0.92, resulting in a surprise of 1.10%.
Positive Estimates and Future Potential
Given AMD’s recent performance, analysts have been adjusting their estimates upward. The Zacks earnings ESP (Expected Surprise Prediction) for AMD is currently positive, signaling a strong potential for another earnings beat. Studies indicate that stocks featuring a positive earnings ESP alongside a Zacks Rank of #3 (Hold) or better successfully deliver positive surprises approximately 70% of the time—suggesting that if ten stocks fit this criterion, seven could surpass the consensus estimates.
The Zacks earnings ESP evaluates the Most Accurate Estimate against the Zacks Consensus Estimate for the quarter. This metric reflects analysts’ revisions that often occur just prior to an earnings release, providing potentially more accurate projections than earlier consensus estimates.
Currently, AMD exhibits an earnings ESP of +2.01%, indicating that analysts are optimistic about the company’s forthcoming earnings. This favorable earnings ESP, combined with the stock’s Zacks Rank #3 (Hold), suggests the likelihood of another earnings beat is on the horizon.
Understanding Earnings ESP and Its Importance
It’s crucial to understand that a negative earnings ESP does not necessarily predict an earnings miss; however, a negative reading can diminish the metric’s effectiveness. Many companies tend to outperform consensus EPS estimates, but beating them isn’t the exclusive reason for a stock’s performance increase. Conversely, some stocks remain stable even after failing to meet estimates.
Thus, assessing a firm’s earnings ESP before its quarterly announcement is essential for enhancing the probability of success. Utilize our earnings ESP Filter to identify the best investment opportunities before earnings reports are released.
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Advanced Micro Devices, Inc. (AMD): Free Stock Analysis report.
This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
