Will Victory Capital (VCTR) Beat Estimates Again in Its Next Earnings Report?

If you are looking for a stock that has a solid history of beating earnings estimates and is well-positioned to continue the trend in its next quarterly report, you should consider Victory Capital Holdings (VCTR). This company, which operates in the Zacks Financial – Investment Management industry, shows the potential for another earnings beat.

Looking at the last two reports, this investment management firm has seen a strong streak of beating earnings estimates. The company has beaten estimates by an average of 2.54% over the last two quarters.

For the last reported quarter, Victory Capital posted earnings of $1.25 per share versus the Zacks consensus estimate of $1.21 per share, representing a surprise of 3.31%. In the previous quarter, the company was expected to post earnings of $1.13 per share and actually produced earnings of $1.15 per share, representing a surprise of 1.77%.

Price and EPS are surprising

With this history, there has been a recent favorable revision to Victory Capital’s earnings estimates. In fact, the stock’s Zacks Earnings ESP (Expected Surprise Prediction) is now positive, which is a great indicator of an earnings beat, 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.

Victory Capital currently has an Earnings ESP of +1.22%, suggesting that analysts have recently become bullish on the company’s earnings prospects. This positive Earnings ESP, combined with the stock’s Zacks Rank #2 (Buy), indicates that another beat is likely just around the corner.

In the case of the Earnings ESP indicator, it is important to remember that a negative value reduces its predictive power; however, it is important to remember that a negative Earnings ESP does not indicate a divergence in earnings.

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.

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report

Victory Capital Holdings, Inc. (VCTR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research