In investing, it’s often not just the news that matters — it’s how investors react to it. One of the most underappreciated signals in the market is when analysts raise their earnings forecasts. Research shows that the market tends to underreact to this kind of good news, creating a window of opportunity for those paying attention.
That’s the premise behind the Earnings Revision Investor strategy developed by Wayne Thorp and implemented by Validea. The model, based on Thorp’s paper How to Profit From Revisions in Analysts’ Earnings Estimates, focuses on companies experiencing positive earnings estimate revisions for both the current and next fiscal year. It excludes any stock with negative revisions and ensures there’s sufficient analyst coverage to avoid statistical noise.
The idea is simple: when analyst sentiment turns meaningfully more optimistic, there’s often more room to run.
Below are 10 well-known names that currently earn a perfect score in Validea’s Earnings Revision model. These companies are benefiting from rising earnings expectations and may be poised to continue outperforming.
🔟 Top Stocks Backed by Upward Earnings Revisions
| Ticker | Company Name | Price | Market Cap ($B) | P/E | Price/Sales | Rel. Strength | Dividend Yield |
|---|---|---|---|---|---|---|---|
| URBN | Urban Outfitters | $73.57 | $6.6 | 15.4 | 1.2 | 88 | 0.0% |
| DELL | Dell Technologies | $125.22 | $85.0 | 19.5 | 0.9 | 41 | 1.5% |
| CLS | Celestica Inc | $159.26 | $18.5 | 44.5 | 1.8 | 94 | 0.0% |
| MPWR | Monolithic Power Systems | $758.64 | $36.3 | 20.1 | 15.2 | 43 | 0.7% |
| NTES | NetEase Inc (ADR) | $132.85 | $84.1 | 18.9 | 5.6 | 80 | 0.7% |
| AMP | Ameriprise Financial | $543.30 | $51.7 | 18.5 | 2.9 | 73 | 1.1% |
| WSM | Williams-Sonoma | $173.19 | $21.3 | 20.1 | 2.7 | 72 | 1.3% |
| KNSL | Kinsale Capital Group | $476.16 | $11.1 | 27.4 | 6.9 | 72 | 0.1% |
| GFI | Gold Fields Ltd (ADR) | $24.20 | $21.4 | 17.4 | 4.1 | 86 | 0.7% |
| PRI | Primerica Inc | $277.24 | $9.1 | 12.6 | 2.9 | 67 | 1.3% |
Why Earnings Revisions Matter
When analysts revise earnings estimates upward, it typically reflects improving fundamentals — stronger demand, better margins, or operational improvements. But the market doesn’t always fully price that in right away. This creates a lag effect that Thorp’s strategy aims to exploit. Validea’s implementation of the model is strict:
- Only upward revisions are allowed (no downgrades for current or next year).
- Stocks must have adequate analyst coverage to avoid anomalies.
- Focus is placed on momentum + fundamentals, not hype.
This disciplined approach helps investors focus on real, quantifiable change—not just headlines.
Final Takeaway
Earnings revisions are one of the clearest signals that a company’s future may be brighter than expected. And when paired with a systematic model like Wayne Thorp’s, they become a powerful way to uncover stocks with improving outlooks before the broader market catches on. These 10 companies—across retail, tech, insurance, and gold — are riding a wave of rising expectations. Investors looking for momentum rooted in fundamentals may want to take a closer look.
Further Research
To dive deeper into the Earnings Revision strategy and discover more stocks experiencing upward analyst estimate revisions, explore the following resources on Validea:
- Wayne Thorp Strategy – Full Guru Analysis
See how the Earnings Revision Investor model works, view current top-scoring stocks, and explore the model portfolio historical performance. - Top Stocks with Upward Earnings Revisions
A regularly updated list of companies that pass the strict criteria of the Wayne Thorp strategy. - Guru Screener Tool
Filter stocks by strategy, sector, valuation, growth, and more to find companies aligned with your investing approach. - Validea Pro
Access deeper analytics, model portfolios, and premium research including composite scoring across all guru strategies.
Use these tools to uncover stocks with improving outlooks and strong fundamentals — before the rest of the market fully catches on.
