Will Corpay (CPAY) Beat Estimates Again in its Next Earnings Report?

If you're looking for a stock that has a history of beating solid earnings estimates and is in a good position to maintain the trend in its next quarterly report, consider Corpay (CPAY). This company, which operates in the Zacks Financial Transaction Services industry, shows potential for further earnings growth.

This provider of business fuel card and payment products has a proven track record of beating earnings estimates, especially when looking at its previous two reports. The company has an average surprise of 0.69% over the last two quarters.

For the most recent quarter, Corpay was expected to report earnings of $4.51 per share, but it instead reported $4.55 per share, a surprise of 0.89%. For the previous quarter, the consensus estimate was $4.08 per share, while the actual earnings were $4.10 per share, a surprise of 0.49%.

Thanks in part to this story, there has been a favorable change in earnings estimates for Corpay recently. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a good indicator of earnings growth, especially when combined with the solid Zacks Rank.

Our research shows that stocks with a combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 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, the definition of which is based on changes. The idea is that analysts who revise their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others who contributed to the consensus had previously predicted.

Corpay currently has an Earnings ESP of +0.45%, suggesting that analysts have recently become more optimistic about the company's earnings prospects. This positive Earnings ESP combined with the stock's Zacks Rank #2 (Buy) suggests there may be another rise ahead.

However, investors should note that a negative Earnings ESP value does not indicate an earnings shortfall, but a negative value reduces the predictive power of this metric.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stocks' rise. On the other hand, some stocks could hold their own even if they end up missing the consensus estimate.

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For this reason, it is very important to check a company's ESP before its quarterly release to increase the chances of success. Make sure to use our Earnings ESP filter to find the best stocks to buy or sell before they are reported.

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