Wall Street is constantly putting out analyst reports and changing stock price targets, on top of every bank’s all-important quarterly estimates on company earnings.
But the problem is that not all estimates are created equal. Wall Street consensus is better on some stocks than it is on others, and in fact, for a bunch of stocks, its estimates are just consistently off.
Business Insider reached out to Estimize — a company that aggregates estimates off The Street, from a community fo 3,000 portfolio managers, independant researchers, traders, asset managers and more — to get a sense of which stocks are the hardest for Wall Street to nail.
Estimize touts that its consensus is 69.5% more accurate than Wall Street’s, and that on the following list of stocks, the difference is kind of striking.
So these are the stocks where Wall Street loses its mojo — you’ll recognise a few of them:
- Yahoo, YHOO
- LinkedIn, LNKD
- MasterCard, MA
- Aspen Technology, AZPN
- Manhattan Associates, MANH
- Lulu Lemon, LULU
- Netflix, NFLX
- Michael Kors, KORS
- SodaStream, SODA
- Nike, NKE
- Herbalife, HLF
- and Goldman Sachs, GS
In the charts below, you’ll see the difference between Estimize’s consensus an actual stock’s earnings per share, and Wall Street’s estimates.
The green line is each company’s actual reported earnings per share. Estimize’s consensus is represented by a blue dotted line, and the black dotted line is Wall Street. All charts go back quarterly, to fall 2011.
Check out LinkedIn’s chart below:
Goldman Sachs’ chart is pretty interesting as well:
And here’s Netflix:
Now this isn’t to say that you should throw out your analyst reports. What it is to say, though, that you’ve got to do your own homework business, especially when the professionals are missing the market too.