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Analyst Consensus Estimate

Earnings & Fundamentals

An analyst consensus estimate is the mean or median of earnings forecasts published by equity research analysts covering a given stock. It represents Wall Street's collective expectation for the company's financial results.

The consensus estimate is the bar a company must clear to 'beat' earnings. Because stocks move on whether they beat or miss this number — not on the raw figure — the consensus is one of the most practically important numbers in investing.

What this tells you

The average of published analyst estimates for a company's coming results. Widely quoted as the number a company is expected to hit.

What it does not tell you

It is an average of forecasts, not a fact about the business. Estimates get revised as a quarter progresses, and they are revised toward what the company itself has guided — so beating consensus often measures how well expectations were managed rather than how the business performed. Coverage is also wildly uneven. A large company may have twenty analysts; a small one may have none at all. An absent consensus is not bad news, it is no news — and a screen that treats the two the same is measuring analyst attention rather than company performance.

Further reading: Wikipedia

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