Earnings estimates significantly higher than street expectations - What to do?Subscribe
My earnings estimates are 10%-15% higher than street consensus as analysts are just taking the high-end range of mgmt. guidance and I believe that is incorrect as management has continuously sandbagged us on guidance so they can "beat n raise" approximately 10%-15% higher each quarter. Guidance appears very conservative, so I'm thinking management is doing this on purpose to pump the stock. In broad terms, is this a fairly common scenario specifically in the TMT space? Does this reasoning seem justifiable for out of consensus estimates generally speaking without getting too granular. There are a number of other factors at play such as industry tailwinds that are really ramping growth to extraordinary levels (security software). Additionally, to support the argument the company IPO'd about a year ago and all the analyst estimates in the IC reports were extremely conservative (25%-30%) LESS than the realized numbers in the recent quarters.
Any thoughts or suggestions appreciated.