Extended Stay America, Inc. STAY is set to report first-quarter 2016 results on Apr 26, before the opening bell. Last quarter, the North Carolina-based hotelier posted a positive earnings surprise of 7.14%. In fact, the company has posted positive earnings surprises in all of the trailing four quarters, with an average earnings surprise of 9.65%. Let’s see how things are shaping up for the upcoming announcement. Factors to Consider Of late, Extended Stay America has been renovating its properties, which has hurt the company's occupancy rates. This trend is expected to continue in the to-be reported quarter. Further, costs related to these renovations would continue to hurt profits. Despite hurting occupancy levels, the transformational initiatives undertaken by Extended Stay would continue to aid RevPAR. Meanwhile, hotels that have already been renovated are witnessing increases in ADR and occupancy levels. Revenue and occupancy growth for these hotels are also higher than the ones that are yet to get a facelift. Further, revenue management and marketing initiatives are likely to drive top-line growth. However, the company’s lack of exposure to the emerging markets limits its revenue growth potential to a large extent. Earnings Whispers Our proven model does not conclusively show that Extended Stay is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below. Zacks ESP: The Earnings ESP stands at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 12 cents. Zacks Rank: Extended Stay has a Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Stocks to Consider Here are some stocks in the broader consumer discretionary sector that investors may consider instead, as our model shows that they have the right combination of elements to post an earnings beat this quarter: Royal Caribbean Cruises Ltd. RCL, with an Earnings ESP of +6.45% and a Zacks Rank #2. Boyd Gaming Corp. BYD, with an Earnings ESP of +36.00% and a Zacks Rank #1. Pinnacle Entertainment Inc. PNK, with an Earnings ESP of +23.21% and a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EXTENDED STAY (STAY): Free Stock Analysis Report PINNACLE ENTRTN (PNK): Free Stock Analysis Report BOYD GAMING CP (BYD): Free Stock Analysis Report ROYAL CARIBBEAN (RCL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research