Earnings Estimate
 |
Definition of 'Earnings Estimate'An analyst's estimate for a company's future quarterly or annual earnings. Future earnings estimates are arguably the most important input when attempting to value a firm. By placing estimates on the earnings of a firm for certain periods (quarterly, annually, etc), analysts can then use cashflow analysis to approximate a fair value for a company, which in turn will give a target share price for publicly traded companies. |
 |
Investopedia explains 'Earnings Estimate'Analysts use forecasting models, management guidance and fundamental information on the company in order to derive an estimate. Market participants rely heavily on earnings estimates to gauge a company's performance when announcing quarterly or annual results. The analysts' earnings estimates are used as a benchmark to measure a firm's performance relative to how experts expected it would do. |
Related Definitions
Articles Of Interest
-
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forward-looking expectations. -
Whisper Numbers: Should You Listen?
These unofficial forecasts hold the potential for insider insight - and investment risk. -
Strategies For Quarterly Earnings Season
Breeze through consensus estimates like the biggest Wall Street forecasters. -
Getting The Real Earnings
EPS helps investors analyze earnings in relation to changes in new-share capital. -
One of my stocks missed the deadline to file its quarterly financial statements. What happens next?
The date and time that a company releases its earnings is very important because investors looking to buy or sell the particular security are counting on the information to help make a decision. ... -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
Depreciation: Straight-Line Vs. Double-Declining Methods
Appreciate the different methods used to describe how book value is "used up". -
Financial Statement: Extraordinary Vs. Nonrecurring Items
When it comes to analyzing a company, successful analysts spend considerable time differentiating between accounting items that are likely to recur going forward from those that most likely will ... -
The Basics Of A Financial Analysis Report
Running financial analysis on a company or industry is a key skill every investor must learn and understand how to undertake without which an ineffective financial report and investment recommendation ... -
GAAP And The IFRS Standards Convergence Efforts In 3 Substantial Areas
Understand the specific steps that have been taken in hopes of converging the GAAP and the IFRS accounting standards, despite the philosophically and culturally based methodological differences ...
Free Annual Reports