Consensus (Analyst Consensus)
The average of the earnings and target estimates from multiple brokerage analysts — the market's expectation level gathered into one number.
In plain terms
Multiple brokerage analysts cover one company. Each puts out an estimate of "this quarter's revenue and EPS will be about this much," and the average of those estimates is the consensus.
Put simply, it is "the average eye-level the market collectively expects." Whether results clear this eye-level decides an earnings surprise versus a shock.
What it tells you
Consensus shows as a number "the expectation already baked into the price." Price usually reflects the consensus to some degree, so when results equal the consensus the price barely moves; it moves only when they stray.
So when reading results, you have to read "how it did versus the consensus," not "was it good," to understand the market reaction.
Formula
consensus = the average (or median) of the estimates of the analysts covering a company
What high or low means
When the consensus rises over time (upgrades), market expectations are growing; when it falls (downgrades), they are cooling. This "direction of estimates" shows the mood even before results.
Even if results beat the consensus, you cannot take it as purely good if the consensus itself had already fallen far.
Consensus is an "average," so it is weakly representative when analysts' estimates diverge greatly. Knowing whether they all see it similarly or are split (the dispersion) is more accurate.
Analyst estimates are influenced by the guidance a company gives. If a company lowers expectations, the consensus falls too, sometimes creating "an easy bar to clear."
Consensus is a future estimate and can miss. Its reliability drops especially when conditions change fast or for a first-of-its-kind business. (※ Our screen shows confirmed results based on SEC filings; it does not provide forward consensus estimates themselves — this term is background for reading earnings articles.)
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see Consensus and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.