Will Tenet (THC) Beat Estimates Again in Its Next Earnings Report?

Have you been looking for stocks that could be well-positioned to continue their earnings streak in their upcoming report? Tenet Healthcare (THC) is worth considering, which belongs to the Zacks Medical – Hospital industry.

Looking at the last two reports, this hospital operator has had a strong streak of beating earnings estimates. The company has beaten estimates by 95.84%, on average, over the last two quarters.

For the last quarter, Tenet was expected to post earnings of $1.45 per share but instead it posted earnings of $3.22 per share, which is a surprise of 122.07%. For the previous quarter, the consensus estimate was $1.58 per share when the company actually posted earnings of $2.68 per share, which is a surprise of 69.62%.

In the case of Tenet, estimates are higher, thanks in part to this earnings surprise history. And when you look at the stock’s positive Zacks Earnings ESP (Expected Surprise Prediction), it’s a great indicator of future earnings beats, especially when paired with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise almost 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat consensus estimates could be as many as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a revision of the Zacks Consensus definition that is related to revision. The idea is that analysts revising their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other contributors to the consensus had previously predicted.

Tenet currently has an Earnings ESP of +7.26%, suggesting that analysts have become bullish on its near-term earnings potential. When we combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is likely just around the corner. The company’s next earnings report is expected to be released on July 24, 2024.

However, investors should remember that a negative Earnings ESP reading does not indicate a failure to achieve profits, but a negative value reduces the predictive power of this indicator.

Many companies end up beating consensus EPS estimates, although that’s not the only reason their stocks appreciate. In addition, some stocks can remain stable even if they end up missing consensus estimates.

For this reason, it is very important to check a company’s Earnings ESP before its quarterly release to increase your chances of success. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they are released.

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