Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.

The final step today is to look at a stock that meets our ESP qualifications. Netflix (NFLX) earns a Zacks Rank #3 29 days from its next quarterly earnings release on January 21, 2025, and its Most Accurate Estimate comes in at $4.26 a share.

Netflix's Earnings ESP sits at 1.22%, which, as explained above, is calculated by taking the percentage difference between the $4.26 Most Accurate Estimate and the Zacks Consensus Estimate of $4.21.

NFLX is just one of a large group of Consumer Discretionary stocks with a positive ESP figure. Carnival (CCL) is another qualifying stock you may want to consider.

Carnival, which is readying to report earnings on March 26, 2025, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently -$0.03 a share, and CCL is 93 days out from its next earnings report.

For Carnival, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.03 is 5.18%.

NFLX and CCL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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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