Investors are always looking for stocks that are poised to beat at earnings season and KLA-Tencor CorporationKLAC may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because KLA-Tencor is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings - with the most up-to-date information possible - is a pretty good indicator of some favorable trends underneath the surface for KLAC in this report.
In fact, the Most Accurate Estimate for the current quarter is currently at $1.65 per share for KLAC, compared to a broader Zacks Consensus Estimate of $1.63 per share. This suggests that analysts have very recently bumped up their estimates for KLAC, giving the stock a Zacks Earnings ESP of +1.48% heading into earnings season.
KLA-Tencor Corporation Price and EPS Surprise
Why is this Important?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here ).
Given that KLAC has a Zacks Rank #1 (Strong Buy) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today's Zacks #1 Rank stocks here .
Clearly, recent earnings estimate revisions suggest that good things are ahead for KLA-Tencor, and that a beat might be in the cards for the upcoming report.
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