Will Universal Health Services (UHS) Beat Estimates Again in Its Next Earnings Report? – July 22, 2024

Have you been looking for a stock that might be well-positioned to continue its earnings streak in its upcoming report? Universal Health Services (UHS – Free report) which belongs to the Zacks Medical – Hospital industry.

The hospital and healthcare operator has had a good run of beating earnings estimates, especially when looking at the two previous reports. The average surprise over the last two quarters was 10.74%.

For the last quarter, Universal Health Services was expected to post earnings of $3.14 per share, but the company instead posted earnings of $3.70, representing a surprise of 17.83%. For the previous quarter, the consensus estimate was $3.02 per share, when in reality the company posted earnings of $3.13 per share, representing a surprise of 3.64%.

Price and EPS are surprising

In the case of Universal Health Services, estimates are trending 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.

Universal Health Services currently has an Earnings ESP of +8.65%, 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 #2 (Buy), we can see that another beat is likely just around the corner. The company’s next earnings report is expected to be released on July 24, 2024.

Investors should remember, however, that a negative Earnings ESP reading does not indicate a failure to achieve expected 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.