Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

2 Stocks to Add to Your Watchlist

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure.

The final step today is to look at a stock that meets our ESP qualifications. PlayAGS (AGS) earns a Zacks Rank #3 two days from its next quarterly earnings release on May 15, 2025, and its Most Accurate Estimate comes in at $0.21 a share.

AGS has an Earnings ESP figure of 68%, which, as explained above, is calculated by taking the percentage difference between the $0.21 Most Accurate Estimate and the Zacks Consensus Estimate of $0.13.

AGS is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Walt Disney (DIS).

Slated to report earnings on August 6, 2025, Walt Disney holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.45 a share 85 days from its next quarterly update.

Walt Disney's Earnings ESP figure currently stands at 0.8% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.44.

AGS and DIS' positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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PlayAGS, Inc. (AGS):Free Stock Analysis Report

The Walt Disney Company (DIS):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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