Definition
Consensus estimate is the average or median of Wall Street analyst predictions for a company's earnings per share, revenue, or other metrics. Stocks move based on results versus consensus - beating estimates is positive, missing is negative. The 'whisper number' is an unofficial expectation that may differ from consensus.
Formula
Consensus EPS = Sum of All Analyst EPS Estimates / Number of Analysts
Example
Ten analysts cover a stock with EPS estimates ranging from $1.10 to $1.30. The consensus is $1.20 - beating that is key.
FAQ
What is Consensus Estimate?
The average of analyst forecasts for a company's earnings or revenue.
How do you calculate Consensus Estimate?
A common formula for Consensus Estimate is: Consensus EPS = Sum of All Analyst EPS Estimates / Number of Analysts
Why is Consensus Estimate important?
Consensus Estimate helps investors evaluate fundamental analysis and make more informed decisions.