Zacks Professional Services

Home >> Estimate Analytics >> Zacks Price Response Indicator


Predict relative stock price performance with better accuracy over the next 10 days.

A basic tenet in Investments is that a company's current value is equal to the company's future earnings discounted to the present. Academic studies show that any positive or negative earnings announcement directly affects the share price. The question is, after the earnings announcement and the stock makes a sudden movement up or down has there been an over-reaction or under-reaction to that new earnings news.

Zacks PRI is a scoring system that identifies stocks after they have reported earnings whose returns are expected to outperform the market over the next 3-10 days. The model scores stocks from A to E. The scoring system correlates the percent surprise and short term price reaction preceding an announcement and the short-term price response following the announcement.

The Zacks PRI optimal time horizon is 3-10 days; consequently many institutional investors' use the model for more of a timing tool for better buy and sell decision around the earnings announcement rather than a method of picking long term out performers.

For instance, the more common uses of The Zacks PRI include:

 Decision tool to buy a stock immediately following good earnings news or waiting to buy into the stock after some profit taking.
 Decision tool to sell a stock immediately following bad earnings news or waiting to sell the stock after bottom fishing is completed. Screening for new purchase candidates

Where can I find the PRI?

 The PRI appears on the top of the Estimate page and also is the centerpiece of the PRI report.
 The PRI report is displayed on the site based on which of the companies in your portfolio will report on a specific day.
 The objective of the PRI report is to provide all of the info Zacks has to help you predict price responses immediately following eps reports.

Return to Estimate Analytics

Home | About Us | Contact Us | Privacy Statement| Disclaimer
Copyright 2024
Zacks Investment Research
10 S. Riverside Plaza, Suite 1600, Chicago, IL 60606
(800) 767-3771 ext. 9455