The importance of real-time analyst model & consensus estimates revisions

ebook-missing-outWhile sell-side analyst estimates of high-level financial metrics, such as revenue or EPS, have been available for many years, deeper-level forecasts of the critical line items that drive company performance have only recently become available in any systematic way. Revisions to these analyst estimates of operating metrics, segment or brand revenues, detailed financial line items, etc. are highly sought after by many investment professionals.

Most who go to such trouble obtain them one of two ways:

  1. Collecting and ingesting analyst spreadsheet models directly
  2. Processing the analyst models through third-party service providers

The snapshot method

In the second method, investors receive snapshots of analyst and consensus estimates typically one to two weeks after earnings, summarizing how analysts have revised their estimates based on the release of new earnings, and a second snapshot one to two weeks prior to the next earnings announcement, reflecting their latest expectations for upcoming earnings.

“We argue that investment professionals are missing critical information with this snapshot approach to capturing analyst revisions of deep estimates.”

Using Visible Alpha’s data, we set out to understand when and how often analysts revise estimates across companies in the S&P 500 during a fiscal quarter. We also wanted to understand how these revisions impacted point-in-time and daily consensus data.

Download the full study to learn why investment professionals need to receive and consume sell-side analyst models in as close to real time as possible throughout the quarter.