Investing 101

_WhatIF: Earnings helps traders make sense of, and take action during earnings season. "What if..." is the question investors are always asking themselves. "What if oil drops from here?" or "What if the Fed surprises at the next meeting?" or "What if Microsoft beats earnings?"_

_This app educates investors and helps them understand what is going on in markets – before and after announcements. WhatIF is free and available to all traders at toggle.ai/earnings, the App Store, and the Play Store._

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Financial Analysts from banks and research houses cover companies and the evolution of their business. In this process, they issue estimates about the EPS and Sales of a company, and often about other measures as well: dividends, cash flow, ebitda etc.

Through this thorough investigation, analysts release ratings for stocks: buy, hold, and sell. The individual ratings are then aggregated to give people an overall picture of analysts’ ratings on a stock. 

A high level of analyst BUY ratings signals a high degree of consensus with regards to future stock price performance. On the other hand, a low level of analyst BUY ratings signals a low level of confidence in the future stock price performance. However, unexpected negative news could lead to a meaningful correction in the price and analysts to review their ratings 

**The Analyst Revision Bias measures how many analysts have reviewed their estimates up or down in the last month**. A reading of +100% means that all analysts have increased their estimates, a reading of -75% means most analysts have decreased them.

**Analyst Revisions** help gauge consensus and understand whether the research community for this stock actually has predictive power or - as sometimes happens - is more of a contrarian indicator: in some cases, when all analysts are one-sided on the trade, it’s a sign to do the opposite.

**Analyst Expected Growth** helps gauge the views of the analyst community on the growth potential for the stock. 

Discounted cash flows, an absolute valuation method, rely on growth expectations to predict future cash flows and hence potential stock prices. Investors can use analyst expected growth as a benchmark for their own growth expectations. 

For example, improving analyst expectations for the company's Earnings Per Share (EPS) outlook can often be incrementally bullish for the stock price. Conversely, less positive analyst expectations for the company's Earnings Per Share (EPS) outlook can often be incrementally bearish for the stock price.


Financial Analysts from banks and research houses cover companies and the evolution of their business - affecting their perceived value. 

Analyst Reviews

Fundamental Valuation Indicators

The return an investor can make on an equity position is divided into two sections: capital and dividend gain.

Capital gain encompasses the appreciation in the price of the asset, compared to when it was first bought. The difference between those two values is the capital gained by the investor, after selling. This value can be expressed as a percentage by dividing the difference by the initial cost amount.

Some equities pay investors a dividend: a portion of the profits to thank shareholders for owning the asset. This is not mandatory but facilitates a healthy relationship between the company and its shareholders. If an asset pays a dividend, this is included in the return yield. The dividend yield can be calculated as the annual dividend per share divided by the current share price.



Return Yield

Analyst Reviews