Will CBOE (CBOE) Beat Estimates Again in Its Next Earnings Report? – July 10, 2024

If you are looking for a stock that has a solid history of beating earnings estimates and is well-positioned to continue the trend into its next quarterly report, you should consider CBOE Global (CBOE Free report.) This company, which operates in the Zacks Securities and Exchanges industry, shows the potential for another earnings beat.

The holding company of the Chicago Board Options Exchange has had a good streak of beating earnings estimates, especially when looking at the past two reports. The average surprise over the past two quarters was 3.69%.

For the last reported quarter, CBOE reported earnings of $2.15 per share versus the Zacks consensus estimate of $2.04 per share, representing a surprise of 5.39%. In the previous quarter, the company was expected to post earnings of $2.02 per share and actually delivered earnings of $2.06 per share, representing a surprise of 1.98%.

Price and EPS are surprising

In the case of CBOE, estimates are trending higher, thanks in part to this history of earnings surprises. 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 the 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.

CBOE currently has an Earnings ESP of +4.37%, suggesting that analysts have become bullish on the 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.

When the Earnings ESP is negative, investors should remember that this will reduce the predictive power of the indicator. However, a negative value is not an indicator of a lack of earnings for the stock.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stock growth. On the other hand, some stocks can maintain their position 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.