Earnings is around the corner and the analysts are predicting that Basic Energy Services, Inc. (NYSE:BAS) is expected to report earnings of $-1.32 per share. Will the analysts hit the mark? Investors will know for sure when the company releases their earnings report on or around 2016-12-01.
Let’s look at the surprise factor from recent quarters. Basic Energy Services, Inc. recorded a surprise factor of 6.94% last quarter. The Earnings Per Share (EPS) was $0.1. The difference was slightly off track from the analysts’ predictions.
Let’s dig a little deeper…
Standard deviation is a quantity calculated to indicate the extent of deviation for a group as a whole. Here’s the standard deviation for Basic Energy Services, Inc. (NYSE:BAS): $0.239. Analysts predict a price target range from $0.5 to $1 with a consensus target from the 4 analysts providing projections currently stands at $0.812. The mean target was last updated on 2016-11-10. Of course, this prediction is short term covering only the next twelve months.
How does it all work?
Let’s take a look at how analysts predict the stock price of a given company. An analyst’s prediction is pretty powerful. They spend all day every day researching the company’s balance sheet trends and cash flow from previous earnings. This information is known as the company’s fundamentals – which help analysts predict future earnings trends. If an analyst changes their outlook on a stock, investors might buy or sell based on that information.
How do investors know if the analysts prediction is accurate? Investors have to be wary of some factors. One common problem is that an analyst might have a pre-existing relationship with a company that is a client of their employer. This relationship produces a conflict of interest. It’s difficult to determine if this relationship exists, so investors have to do their own research, too. Investors should especially be wary if an analysts has an overly optimistic outlook on a stock that traditionally has not been performing well.
What’s the consensus?
Investors can determine the consensus on a stock by looking at the average brokerage recommendation score. The average brokerage recommendation (ABR) is an average of the all of the recommendations of Wall Street analysts and is based on a ranking of 1 to 5 — 1 representing a Strong Buy and 5 representing a Strong Sell. Presently Basic Energy Services, Inc. (NYSE:BAS) has shares with an ABR of 3. That ranking is based on the recommendations of 4. Investors should still be wary of overly optimistic rankings and be careful to do their own research before making any major investment decisions.
This article was written with the intention of providing useful information, and is not intended as a recommendation to buy or sell a stock.