What is a Whisper Number?
How Does a Whisper Number Work?
To create a whisper number, somebody (usually a website, investment bank, brokerage firm, or other institution) polls investors and analysts about what they really think a particular company's per share are going to be for the next quarter and/or year. Obtaining the results -- the whisper number -- is usually a matter of privilege: preferred clients, paying website subscribers, and other connected people are often the only ones who have access to the information.
Whisper numbers often differ from consensus estimates, which are generally company-guided, analyst-driven, published forecasts. Thomson First call, Zacks, and Reuters are prominent providers of consensus estimates. Whereas consensus estimates are typically math-driven, whisper numbers often are the result of "gut feel" or less quantitative information. They are a big part of the Wall Street rumor mill.
Why Does a Whisper Number Matter?
Whisper numbers are most useful when they differ from the consensus estimates, because they can sometimes predict earnings surprises. Earnings surprises in turn often lead to quick changes in the stock's price--when actual earnings exceed expected earnings, the stock price jumps; when actual earnings "miss" expected earnings, the stock price falls. It is possible for a company to beat consensus, for example, but miss the whisper number.
If the whisper numbers prove more accurate than the consensus, they begin to carry a tremendous amount of weight; for companies that don't have a lot of formal analyst coverage, whisper numbers can be even more influential.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
If you regularly shop at department store chain Kohl's (NYSE: KSS), you may have spotted an unusual merchandising misstep in the spring of 2012. The retailer, which had...Read More →
Used cars today are a great buy. No longer is the 100,000 mile mark a warning sign as much as it is a "deep discount" sign. In fact, owners of Toyotas, Hondas and Subarus will tell you that...Read More →
Moving averages define the trend and provide support or...Read More →
Worry-free finances = a happy, productive retirement, right? Well, that goal is easier to accomplish than you think. It only takes a little sacrifice... and as much planning as you can...Read More →