Earnings announcements have been few and far between in the last month. This is the usual “calm before the storm” this time of year, and it will last for another couple of weeks. But it does not mean that we at Proximilar have been sitting on our hands or that our AI has nothing to predict. We have been tirelessly working on some very exciting new features we plan to share with you this fall. Today, we want to give you a first look at one of them: early forecasts for the biggest names.
AI models live and die by the data you feed into them. Because we built our earnings models to be as accurate as possible, they require a lot of data and revise their predictions as fresh data points arrive. Until now this meant that we would wait for a company’s fiscal quarter to end before generating a forecast of its results. But recently we found a way to start making forecasts sooner. Without delving into technical details: in addition to being accurate, our AI is also quite flexible and it does not demand that we provide it with every single piece of data. Sometimes it finds a way to make do with less, filling in the missing information based on its vast learned experience.
The Big 20
We selected a few bellwether companies whose earnings drive the market the most, and asked the model for an early prediction of both EPS and revenues. These are 20 companies that will announce their results in the next 5 weeks, and which invariably draw lots of investor attention. Unsurprisingly, most of them are giant tech and financial services companies. Here are our models’ preliminary earnings estimates for them:
- Apple (AAPL): $1.36 EPS forecast (Wall Street consensus + $0.13 EPS surprise forecast), $88,684 mil revenue forecast (consensus + $3,854 mil revenue surprise forecast)
- Tesla (TSLA): $1.56 EPS forecast (+$0.18 EPS surprise forecast), $13,466 mil revenue forecast (+$435 mil revenue surprise forecast)
- Amazon (AMZN): $11.46 EPS (+$2.54 surprise), $111,967 mil revenue (+$339 mil surprise)
- Microsoft (MSFT): $2.24 EPS (+$0.18), $45,875 mil revenue (+$2,027 mil)
- Alphabet (GOOGL): $26.78 EPS (+$3.09), $56,295 mil revenue (+$4,252 mil)
- Facebook (FB): $3.70 EPS (+$0.51), $31,141 mil revenue (+$1,646 mil)
- Alibaba (BABA): $2.18 EPS (+$0.18), $32,595 mil revenue (-$31 mil)
- Netflix (NFLX): $2.56 EPS (+$0.005), $7,496 mil revenue (+$18 mil)
- Intel (INTC): $1.22 EPS (+$0.11), $19,084 mil revenue (+$839 mil)
- Advanced Micro Devices (AMD): $0.75 EPS (+$0.09), $4,216 mil revenue (+$108 mil)
- PayPal (PYPL): $1.16 EPS (+$0.09), $6,325 mil revenue (+$84 mil)
- JPMorgan Chase (JPM): $3.19 EPS (+$0.30), $30,383 mil revenue (+$782 mil)
- Twitter (TWTR): $0.23 EPS (+$0.06), $1,359 mil revenue (+$73 mil)
- Shopify (SHOP): $1.90 EPS (+$0.69), $1,270 mil revenue (+$122 mil)
- Mastercard (MA): $2.31 EPS (+$0.12), $5,189 mil revenue (+$233 mil)
- Snap (SNAP): $0.11 EPS (+$0.03), $1,220 mil revenue (+$123 mil)
- Visa (V): $1.64 EPS (+$0.10), $6,838 mil revenue (+$326 mil)
- Bank of America (BAC): $0.76 EPS (+$0.06), $21,866 mil revenue (+$287 mil)
- Goldman Sachs (GS): $10.94 EPS (+$1.28), $12,981 mil revenue (+$1,707 mil)
- Exxon Mobil (XOM): $1.55 EPS (+$0.18), $71,367 mil revenue (+$1,433 mil)
Positive outlook, overblown fears
What is the big-picture takeaway from these figures? For starters, it should not come as a shock that almost all of our AI’s earnings estimates are above the Wall St analyst consensus. What is more interesting is that our forecasts tend to be more bullish than most crowdsourced estimates, too. To be exact, we are more optimistic in 75% of EPS predictions and 80% of revenues forecasts. The names we are relatively pessimistic about are TSLA, BABA, NFLX and, as far as revenues are concerned, AMZN.
We view our AI’s positive outlook on such an overwhelming majority of large companies as a clear vote of confidence for the Q3 earnings season. This is a bullish signal for the market in general, suggesting that recent fears of a downturn are overblown.
For now (i.e. in the next two weeks) we do not include these forecasts into our weekly spreadsheet. This is a new, experimental feature that we will validate fully before rolling it out officially. But although these forecasts can change in October as our AI models get access to more data, we firmly believe these are higher quality estimates than any others available right now. (For instance, earnings whispers are not available at all this far in advance, and generally won’t be until the week before the announcement.)
As the the Q3 earnings season gets underway, we will continue to arm you with the world’s best earnings forecasts for companies both big and small. We will also continue to bring you new features and useful new ways of analyzing earnings. Stay tuned for more updates.