How do you measure the dispersion of analysts estimates

[newwurldmn]

It sounds like a tricky metric to nail down, with stale analysts, number of analysts dependent on market cap etc. Could be a reasonable signal if you have other signals though

Yes. Plus there is a gamesmanship analysts play. They aren’t in it to be accurate as much as to market their “insights” and some might be prone to create outrageous forecasts to get noticed.

 

[Kevin Schmit]

> higher analyst dispersion led to more volatility.

Was that the implied jump increased going into earnings or the jump was much higher than expected after earnings?

Good question. Higher volatility of what? Stock price reaction to earnings or earnings surprise? And how do you normalize surprise? Usual (actual - estimate) / estimate leads tp instability when estimate is at or near zero. Normalize by revenues?, share price?, avg $volume?

 

[TheBigShort]

Good question. Higher volatility of what? Stock price reaction to earnings or earnings surprise? And how do you normalize surprise? Usual (actual - estimate) / estimate leads tp instability when estimate is at or near zero. Normalize by revenues?, share price?, avg $volume?

hmm this has me thinking. Some companies (with low earnings) usually move on the revenue surprise, not the earnings and therefor should be grouped by the dispersion of the revneue estimates and not the earnings. Ill share with this group my findings once I get back from the cottage