Crowdsourcing — when a task normally performed by employees is outsourced to a large network of people via an open call — is making inroads into the investment research industry. We shed light on this new phenomenon by examining the value of crowdsourced earnings forecasts. Our sample...

Crowdsourcing — when a task normally performed by employees is outsourced to a large network of people via an open call — is making inroads into the investment research industry. We shed light on this new phenomenon by examining the value of crowdsourced earnings forecasts. Our sample...

An examination of analysts' accuracy in predicting annual earnings for firms reporting losses and firms reporting profits finds that analysts are ten times more accurate in predicting the earnings of profit firms. They have also improved their predictive ability for profit firms since the...

We argue that accounting conservatism makes earnings forecasting difficult by introducing transitory components in reported earnings. These transitory components are likely to be disproportionately represented in firms reporting losses. We show that analysts' mean forecast errors and absolute...

By issuing earnings forecasts for both current and future years simultaneously, managers provide the multi-year data required for many valuation models and help investors sort out transitory and permanent shocks. We find that firms that are overpriced and have more transitory earnings tend to...