Earnings Estimate

Earnings estimates are predictions made by financial analysts about a company’s future profitability, usually expressed as earnings per share (EPS). These estimates are based on factors like past performance, market conditions, and company guidance. Investors and analysts use earnings estimates to gauge a company’s expected financial health and compare actual earnings results against these forecasts. Earnings estimates can significantly impact stock prices; if a company’s actual earnings fall short of estimates, its stock may drop, while beating estimates can boost the stock price.

Example

An analyst estimates that a company will report earnings of $1.50 per share for the next quarter based on sales trends and market conditions.