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Analyst Earnings Estimate Accuracy

The Earnings Estimate Accuracy Rating, displayed as 4 or 5 blue stars, represents StarMine's proprietary metric for earnings estimate accuracy or "Relative Accuracy Score" (RAS). StarMine analyzes every earnings estimate and revision published by thousands of sell side analysts around the world. RAS is a relative measure; it compares an analyst's performance with that of their peers. To get a high score, an analyst must make estimates that are both significantly different from, and more accurate than, other analysts' estimates.

RAS takes into account many factors, including the analyst's absolute earnings forecast error, that error compared to the forecast of other analysts, the variance of the errors, the timing of each revision, and the absolute value of the stock's actual reported earnings. StarMine computes RAS daily for an analyst's overall score on a stock and groups of stocks.

StarMine then ranks analysts according to RAS and awards the following ratings:

  • The top 10% of analysts earn 5 stars
  • The next 22.5% earn 4 stars
  • The next 35% earn 3 stars
  • The next 22.5% earn 2 stars
  • The bottom 10% earn 1 star

Analysts who receive 4 or 5 stars are displayed on Yahoo! Finance with their rating. Analysts who receive 1, 2, or 3 stars are listed as "Other Ranked Analysts."

To learn more about StarMine, visit StarMine.com.

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