Consensus estimate.
In plain English
A consensus estimate is what you get when a data provider collects the individual forecasts from analysts who cover a company and averages them into one number. Providers may use a mean or a median, and they may drop stale forecasts, so two services can publish slightly different consensus numbers for the same company. The estimate is not a company statement and carries no regulatory weight. It is the market's rough expectation, and it drifts as analysts update through the quarter.
01Why it matters
Headlines that say a company beat or missed are measuring against this average, so knowing it is an opinion poll of analysts rather than a target the company promised changes how much weight the headline deserves.
02The math, step by step
Five analysts forecast quarterly earnings per share of $0.90, $0.95, $1.00, $1.05, and $1.10. Add them and you get $5.00. Divide by 5. The consensus estimate is $1.00 per share, even though no single analyst picked that number.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
Guidance comes from the company itself. A consensus estimate comes from outside analysts. The two often differ, and companies sometimes guide below what analysts expect, which lowers the bar the next report has to clear.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice