The Zacks Rank Demystified: Discovering Top Aerospace Stocks to Purchase

Building a Winning Investment Portfolio

Regardless of whether your investment approach centers on growth, value, income, or momentum, achieving success in the stock market requires expertise, thorough analysis, and a bit of good fortune.

But how can you assemble a mix of stocks that delivers returns to support your retirement, fund your children's education, or meet your financial goals both short and long term?

This is where the Zacks Rank comes into play.

Understanding the Zacks Rank System

The Zacks Rank is an exclusive stock rating methodology that leverages changes in earnings forecasts to help investors build portfolios poised for success.

This system evaluates stocks based on four key components: Agreement, Magnitude, Upside, and Surprise.

• Agreement: Measures whether analysts are collectively revising earnings estimates in the same direction. A higher percentage of upward revisions increases the likelihood of outperformance.
• Magnitude: Assesses the scale of recent changes in consensus earnings estimates for the current and upcoming fiscal years.
• Upside: Compares the most accurate estimate calculated by Zacks to the consensus estimate.
• Surprise: Looks at recent earnings per share surprises; companies with positive surprises are more likely to exceed expectations again.

Each factor receives a score, updated nightly, which is then used to rank stocks into five categories, ranging from "Strong Buy" to "Strong Sell."

The Influence of Institutional Investors

The Zacks Rank enables individual investors to tap into the strategies used by institutional investors.

Institutional investors, who manage vast sums in hedge funds, mutual funds, and investment banks, have a significant impact on market movements due to the scale of their investments. Markets often follow their lead.

These professionals rely on valuation models centered around earnings and forecasts to determine a company's fair value. When earnings estimates rise, so does the perceived value of the company.

Institutions typically buy stocks with improving earnings estimates and sell those with declining forecasts. This behavior can drive stock prices higher, benefiting investors who act early.

Retail investors who respond quickly to upward revisions can gain an edge, as institutions may take longer to build their positions. Early movers can also benefit from subsequent institutional buying.

The Zacks Rank not only helps you capitalize on trends in earnings estimate revisions but also provides access to stocks favored by professional investors.

Investing with the Zacks Rank

The Zacks Rank has a track record of enhancing portfolio performance. For example, stocks rated #1 (Strong Buy) have outperformed the market in 26 of the past 32 years, delivering an average annual return of 23.86%.

Stocks newly assigned a #1 (Strong Buy) rating often offer substantial profit opportunities, while those downgraded to #4 (Sell) or #5 (Strong Sell) tend to underperform.

Consider ATI Inc. (ATI), added to the Zacks Rank #1 list on February 27, 2026. Based in Pittsburgh, ATI is a diversified producer of specialty materials, formed in November 1999 following the spin-off of Teledyne Technologies and Water Pik Technologies by Allegheny Teledyne.

In the past 60 days, three analysts have raised their earnings forecasts for fiscal 2026, and the Zacks Consensus Estimate has climbed by $0.17 to $4.12 per share. ATI has also delivered an average earnings surprise of 11.2%.

For the current fiscal year, earnings are projected to grow by 27.2%, with revenue expected to rise by 8.2%.

ATI's stock has surged 34.4% over the last four weeks, while the S&P 500 has declined by 0.5%.

Key Takeaways

With a top-tier ranking, positive earnings estimate trends, and strong price momentum, ATI stands out as a compelling option for investors.

Explore Today's Leading Stocks

The exclusive Zacks #1 Rank List, built on the quantitative Zacks Rank system, has more than doubled the S&P 500's performance since 1988. Using the Zacks Rank in your own trades can enhance your returns immediately.

Zacks' Top Pick for Potential Doubling

Our research team has identified five stocks with the highest likelihood of gaining 100% or more in the coming months. Among them, Director of Research Sheraz Mian spotlights the stock with the greatest upside.

This standout is a lesser-known satellite communications company. With space poised to become a trillion-dollar industry and a rapidly expanding customer base, analysts anticipate a significant revenue surge in 2025. While not all picks achieve extraordinary gains, this one could outperform previous Zacks selections like Hims & Hers Health, which soared by 209%.

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