Charting Earnings & Revenue Estimates, and Actuals with ChartIQ
ChartIQ is the only stock charting program on the market that includes a visualization of earnings and revenue – both historical, and future estimates. As you evaluate your positions going in to earnings release season, understanding the market expectation (both Wall St. Consensus and the crowd, via Estimize) is critical to managing risk and seizing upside opportunity. With the ChartIQ Price Horizon, you really can trade ahead of the crowd.Try it Free for 10 Days!
What is it?
Earnings season has always produced volatility in equity prices, leading many technicians to sit on the sidelines completely, or take overly cautious positions. The “Wall St. Consensus” has always given us numbers for what analysts expect a company’s release to say, and now Estimize gives us a much more accurate set of crowd expectations. In the past, these have just been numbers for fundamental investors – completely out of context of the price action. Now with ChartIQ, you can visually see two critical things:
- How the price action has reacted to earnings/revenue releases in the past
- What the market expects for future quarters
Armed with this information, you’ll be able to make more informed trades going in to an earnings release.
The ChartIQ earnings package is made up of three components – the Miss/Beat Indicator™, the data table, and the Price Horizon™.
What is Estimize?
Estimize produces corporate earnings and revenue estimates that are more accurate and representative than sell-side-only data sets. With a platform that is open to contribution from a wide range of individuals, with different backgrounds and viewpoints, Estimize provides a broader, and more accurate, representation of market expectations.
Estimize has over 2,500 contributing buy-side and independent analysts, & is more accurate than Wall St 69.51% of the time.
For more information, visit estimize.com
The Price Horizon™
For each future quarter, ChartIQ Price Horizon visually plots a target price based on the Estimize consensus estimate (which is more accurate than Wall Street 69.51% of the time) as well as the Wall Street consensus numbers themselves. ChartIQ also provides you with a visual representation of the range and distribution of the contributed estimates from the over 2,500 buy side and independent analysts on Estimize.
The Price Horizon can be enabled based on EPS or Revenue performance. While EPS is generally considered more accurate, some companies (particularly those with near-0 or negative earnings!) are best viewed with Revenue.
As you can see in the above example, the price targets for the upcoming release are pretty consistent. Let’s look at this zoomed in, so that you can see what makes up the horizon.
ChartIQ Visual Earnings Price Horizon Key
The Price Horizon is made up of three key components:
- Distribution of Estimize crowd estimates – here you can see bubbles of varying size along the dotted line. The more implied price targets at a particular point, the larger the bubble.
- Estimize Consensus – implied price target based on the consensus number delivered by Estimize, based on their algorithmic analysis of the crowd’s estimates.
- Wall St. Consensus – implied price target based on the Wall St. Consensus estimate.
Miss / Beat Indicator™
The Miss/Beat Indicator is designed to visually highlight when a company has beat, met, or missed market expectations – that of the Wall St. Consensus as well as the Estimize crowd. When you enable the Miss / Beat Indicator from the Estimize menu, you can choose to see earnings or revenue – you can also enable two panels, one for each.
The indicator is made up of a few critical components:
- The vertical dashed line – this connects the indicator to the price action on the day of the release, so you can see what impact the news had on the market.
- The long, dark line – this shows where actual earnings came in. By using the crosshairs, you can mouse over the line and see the actual number.
- The short, thin lines – these represent the Wall St. and Estimize estimates going in to the earnings release.
- Green or red shading – these show the miss or beat vs. actuals.
While you can hover using the crosshairs to get exact numbers, the data table (see below) is better for that. The Miss/Beat Indicator is designed to give an at-a-glance perspective. As such, it’s often best to zoom out a bit and look at the big picture.
Here’s Apple (AAPL) EPS data, visualized with ChartIQ
And another great chart, this time Ford (F) EPS visualized along with the price action:
The Data Table
Once you’ve spotted the broader trend and how the market treats a particular company’s performance, it’s time to look in to the details. The data table contains all the key information for a more detailed analysis.
There are two main sections of the table – one for earnings and one for revenue, with three lines each (actual, Estimize, and Wall St. estimates). Off to the right you can also see quarter-on-quarter performance, annualized totals, and price/earnings ratio (P/E)
Let’s take a look at a great example from Ford (F):