Are you looking for a stock that may be well-positioned to maintain an earnings beat in its next report? Planet Fitness (PLNT), which belongs to the Zacks Leisure and Recreation Services industry, may be worth considering.
This fitness center operator has impressively beat revenue estimates, especially when looking at its last two reports. The average surprise rate over the last two quarters was 13.82%.
For the most recent quarter, Planet Fitness was expected to post earnings of $0.55 per share, but instead it reported earnings of $0.59 per share, delivering a surprise of 7.27%. The prior quarter's consensus estimate was $0.54 per share and it actually produced $0.65, delivering a surprise of 20.37%.
Given this earnings history, expectations for Planet Fitness have been trending higher lately. In fact, the company's Zacks Earnings ESP (Expected Surprise Prediction) is positive, which is a great sign of earnings improvement, especially when you combine this metric with its impressive Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher generate a positive surprise nearly 70% of the time. In other words, if there are 10 stocks in this combination, the number of stocks that beat the consensus estimate could be up to 7.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is the Zacks Consensus Version, whose definition is related to change. The idea here is that analysts revising their forecasts right before an earnings announcement have the latest information, and that information is better than what they and other analysts contributing to the consensus had previously predicted. is also likely to be accurate.
Planet Fitness's current Earnings ESP is +1.66%, suggesting that analysts are bullish on the company's near-term earnings potential. This positive Earnings ESP, combined with the stock's Zacks Rank #3 (Hold), suggests that another beat could be on the horizon.
However, investors should note that while a negative Earnings ESP measurement does not indicate an earnings outlier, negative values do reduce the predictive power of this metric.
Many companies end up beating consensus EPS estimates, but this isn't the only reason for the stock price rise. Additionally, some stocks may remain stable even if they ultimately underperform consensus estimates.
This is why it is so important to check a company's earnings ESP prior to a quarterly release to increase your chances of success. Be sure to utilize our Earnings ESP filter to find the best stocks to buy or sell before the report is released.
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Planet Fitness, Inc. (PLNT): Free Stock Analysis Report
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