In 1978, our founder and CEO Len Zacks developed a breakthrough idea. Knowing that a company’s current value is equal to its future earnings discounted to the present, he realized that by studying earnings estimate revisions in aggregate, he could build a powerful, accurate way to predict future stock prices.
From this idea he developed the Zacks Rank, the firm’s flagship offering. A key difference between our ranking system and others is that ours does not rely on past performance—the Zacks Rank is a predictive model that seeks to forecast future prices.
In addition, the Zacks Rank has produced impressive and consistent results. Over the last three decades, our #1 ranked stocks have produced an annualized return of approximately 25%. That’s more than double the 11% return of the S&P 500 during the same period.
In addition to the Zacks Rank for stocks, we also offer the Zacks ETF Rank and the Zacks Mutual Fund Rank. These tools are based on the same earnings estimate revision principle but optimized for the unique characteristics of these investment products.
Both the Zacks ETF Rank and the Zacks Mutual Fund Rank are accessible in Advisor Tools.
The Zacks Rank is an essential component of the Zacks Advisor Tools platform and can be found throughout the site in conjunction with other vital performance metrics.
The optimal time horizon for the Zacks Stock Rank is 1-3 months. For this reason, many institutional investors use it as a timing tool rather than a method of picking long-term outperformers.