If you’re looking for a stock that has a solid history of beating earnings estimates and is well-positioned to maintain the trend in its next quarterly report, then you should consider Corpay (CPAY). This company, which operates in the Zacks Financial Transaction Services industry, shows potential for another earnings beat.

This provider of fuel card and payment products for businesses has an established track record of exceeding earnings expectations, especially looking at its previous two reports. The company boasts an average surprise over the past two quarters of 0.69%.

For the most recent quarter, Corpay was expected to post earnings of $4.51 per share, but instead the company reported $4.55 per share, a surprise of 0.89%. For the previous quarter, the consensus estimate was $4.08 per share when it actually returned $4.10 per share, a surprise of 0.49%.

Partly due to this history, there has been a favorable change in earnings expectations for Corpay lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a good indicator of an earnings beat, especially when combined with the 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 nearly 70% of the time. In other words, if you have ten 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 estimate to the Zacks Consensus Estimate for the quarter; the most accurate estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts who revise their estimates just before earnings releases have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had previously predicted.

Corpay currently has an Earnings ESP of +0.45%, 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 a new run may be on the horizon.

However, investors should note that a negative Earnings ESP value is not indicative of an earnings loss, but a negative value does reduce the predictive power of this measure.

Many companies end up beating the consensus EPS estimate, but that doesn’t have to be the only basis for their stock’s rise. On the other hand, some stocks may hold up even if they ultimately miss the consensus estimate.

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Therefore, it is very important to check a company’s Earnings ESP before its quarterly release to increase the chances of success. Make sure you use our Earnings ESP filter to discover the best stocks to buy or sell before they report.

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