Will RLI Corp. (RLI) Beat Estimates Again in Its Next Earnings Report?

If you're looking for a stock that may continue its streak of beating earnings estimates, consider RLI Corp. (RLI), a company in the Zacks Insurance - Property and Casualty industry.

This specialty insurance firm has a strong track record for surpassing earnings expectations, particularly evident in its last two reports. Over the past two quarters, RLI has shown an impressive average earnings surprise of 30.54%.

In the most recent quarter, RLI Corp. reported earnings of $1.31 per share, significantly outpacing the Zacks Consensus Estimate of $0.98 per share, which translates to a surprise of 33.67%. For the quarter prior, the company was forecasted to earn $1.35 per share but achieved earnings of $1.72, resulting in a surprise of 27.41%.

Earnings and Price Surprises

The company's history of positive surprises has recently led to optimistic earnings estimate revisions for RLI Corp. Currently, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is looking favorable, a strong indicator for a potential earnings beat when combined with its solid Zacks Rank.

Research has shown that companies holding a positive Earnings ESP along with a Zacks Rank of #3 (Hold) or better tend to surprise on earnings estimates nearly 70% of the time. This means out of ten stocks with this favorable combination, around seven are likely to beat the consensus estimates.

The Zacks Earnings ESP measures the difference between the Most Accurate Estimate and the Zacks Consensus Estimate for the upcoming quarter. The Most Accurate Estimate reflects the latest insights from analysts just before the earnings release, which may be more precise than earlier predictions.

Currently, RLI Corp. boasts an Earnings ESP of +13.92%, indicating that analysts are increasingly optimistic regarding the company’s earnings outlook. Coupled with a Zacks Rank of #3 (Hold), this positivity suggests that another earnings beat may be on the horizon. The next earnings report for RLI is scheduled for January 22, 2025.

It’s essential to keep in mind, however, that a negative Earnings ESP does not necessarily predict an earnings miss, but it does diminish the reliability of this metric.

Many companies do exceed the consensus EPS estimate, although this is not the sole factor driving their stock prices upward. Conversely, some stocks might not see significant fluctuations even if they fall short of estimates.

Therefore, it's crucial to monitor a company's Earnings ESP in advance of its quarterly rolls to enhance the chances of predicting success. Utilizing the Earnings ESP Filter can help in identifying the best stocks to consider before earnings are reported.

RLI, Earnings, Estimates