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

Looking for a stock that has consistently beaten earnings estimates and may be well-positioned to continue its streak into its next quarterly report? Woodward (WWD – Free Report), belonging to the Zacks Instruments – Control industry, could be a great candidate to consider.

Looking at the last two reports, this maker of cockpit controls and other equipment for the defense and aerospace markets has had a strong streak of beating earnings estimates. The company has beaten estimates by 29.19%, on average, over the last two quarters.

For the last quarter, Woodward was expected to post earnings of $1.28 per share but instead posted earnings of $1.62 per share, representing a surprise of 26.56%. For the previous quarter, the consensus estimate was $1.10 per share, when in fact earnings were $1.45 per share, representing a surprise of 31.82%.

Price and EPS are surprising

In Woodward’s case, estimates are 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 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.

Woodward currently has an Earnings ESP of +2.87%, suggesting analysts have become bullish on the near-term earnings potential. When we combine this positive Earnings ESP with the stock’s Zacks Rank #2 (Buy), it shows 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, 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.