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

Have you been looking for a stock that could be well-positioned to continue its strong earnings streak in its upcoming report? Consider Veradigm (MDRX), which belongs to the Zacks Technology Services industry.

This electronic health records company has a strong reputation for beating earnings estimates, especially looking at its two previous reports. The company boasts an average earnings surprise of 16.78% over the last two quarters.

For the last quarter, Veradigm was expected to post earnings of $0.19 per share but instead it reported $0.23 per share, delivering a surprise of 21.05%. The consensus estimate for the previous quarter was $0.16 per share but actually delivered $0.18 per share, delivering a surprise of 12.50%.

The price and EPS are surprising

In the case of Veradigm, 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 a combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimates to the Zacks Consensus Estimates for the quarter; The Most Accurate Estimate is the Zacks Consensus version, which is defined in terms of change. The idea is that analysts reviewing their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other consensus participants had previously predicted.

Veradigm currently has an Earnings ESP of +7.76%, 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 February 23, 2023.

In the case of the Earnings ESP metric, keep in mind that a negative value reduces its predictive power; however, a negative Earnings ESP does not imply a loss of earnings.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stock to grow. On the other hand, some stocks may hold their ground even if they miss consensus.

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

Veradigm Inc. (MDRX): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research