DEFINITION of 'Whisper Number'

A whisper number refers to the purported, unofficial and unpublished earnings per share (EPS) forecasts that are believed to circulate among professionals on Wall Street. In this context, whisper numbers were believed to generally reserved for the favored (wealthy) clients of a brokerage.

A whisper number can also refer to a company's forecasted future earnings or revenues according to the collective expectations of individual investors. In this sense, a whisper number would be compiled by a website polling its visitors. Individuals come up with a whisper number using their own analyses of company financials, market trends and gut feelings.

BREAKING DOWN 'Whisper Number'

Whisper numbers can be especially useful when they differ from the consensus forecast. They can be used as a tool to help spot (or avoid) an earnings surprise (or disappointment). Of course, this is only relevant if they are more accurate than the consensus estimate. This depends on the sources used to calculate them.

Increased regulatory scrutiny on the brokerage industry made it much more difficult to get a whisper number in the traditional sense. For example, regulations such as Sarbanes-Oxley provided for stricter rules on how companies disclose financial data. Employees, financial professionals and brokerages face significant penalties if they provide insider earnings data to a select group of people. While it is impossible to know the extent to whether whisper numbers circulate among the wealthy, it is highly unlikely that a small investor could access that data.

Myths And Questions Raised About Whisper Numbers

There has been some doubt raised about whether whisper numbers were actually shared by brokers with their high-net-worth clientele. Some brokers have sought to debunk the entire concept as a myth. Whisper numbers based on individual opinions and assessments rather than broker input have come into play with the market as they are marketed by a variety of websites. Their use has sparked some controversy because of the potential influence over the market.

For example, a company might be expected to beat consensus estimates but a whisper number could be set even higher. If the company does beat earnings expectations yet misses the whisper number, its shares could still fall. This may be because investors bought up the stock in advance of the earnings release using the whisper number as their guide. So even though the consensus estimates were surpassed, investors may be disappointed by the results.

It is possible for a whisper number to be a more accurate forecast than consensus estimates when it comes to predicting earnings. This does not necessarily make whisper numbers more valid as predictive options.

RELATED TERMS
  1. Brokerage Company

    A brokerage company's main responsibility is to be an intermediary ...
  2. Consensus Estimate

    A consensus estimate is a figure based on the combined estimates ...
  3. Broker

    1. An individual or firm that charges a fee or commission for ...
  4. Outside Broker

    The term outside broker has several applications in finance. ...
  5. Alphabet Broker

    Alphabet broker is a slang expression in which the initials of ...
  6. Deep Discount Broker

    A deep discount broker mediates sales and exchanges between securities ...
Related Articles
  1. Investing

    The Importance Of Tracking The Whisper Number (AAPL, FB)

    Don't let the name fool you: Whisper numbers are making themselves heard. Here's why you should be paying attention.
  2. Insights

    Earnings Forecasts: A Primer

    Learn how this key metric is calculated and how it is used to judge market performance.
  3. Investing

    Can Good News Be A Signal To Sell?

    Sometimes positive announcements can mean bad news for a stock. Find out why.
  4. Investing

    Signs That Your Investments Need Attention

    It's important to prune stocks and mutual funds whose progress doesn't follow the expected path.
  5. Personal Finance

    5 Myths About the Financial Advisory Business

    This is the difference between myth and reality in the financial advisory world.
  6. IPF - Broker

    The Complete Guide to Choosing an Online Stock Broker

    Online stock brokers have made high-risk, high-reward investing available to the broader public.
  7. Investing

    Everything Investors Need To Know About Earnings

    We go over the concepts behind the excitement over the most important figure in the stock market.
  8. Investing

    Picking your first broker

    If you're a rookie investor, choosing a broker may be your first big investment decision. Learn more on whether you should you go with a full-service broker or a discount broker.
  9. Investing

    The 5 Types Of Earnings Per Share

    Learn the five varieties of Earnings Per Share (EPS) and what each represents can help an investor determine whether a company is a good value, or not.
RELATED FAQS
  1. Why would my stock's value decline despite good news being released?

    There are many possible explanations for a stock's value declining despite good news being released. Investors should remain ... Read Answer >>
  2. Why are most brokerage firms owned by banks?

    Learn about the differences between investing with a bank-owned brokerage firm or with an independent broker. Get real answers ... Read Answer >>
  3. What is the role of an index number in economics?

    Read about the role of an index number in economics and how index numbers can be applied to all kinds of data, such as inflation ... Read Answer >>
Trading Center