Whisper Number

Article byKosha Mehta
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

What Is A Whisper Number?

Whisper numbers are very popular on Wall Street. It refers to earnings per share projections that experienced traders and fund managers make. These numbers are unofficial and have not been published but are rumored to be accurate. Additionally, the whisper number is used for any quarterly report or news announcement in any sector.

Whisper Number

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A herd of individual investors’ estimates of future earnings or sales can also be referred to as a “whisper number,” which is another use of this term. In this context, polling its users may accumulate a whisper number. Before a firm’s profits and sales are expected to be declared, the “whisper figure” helps traders choose their side.

Key Takeaways

  • A “whisper figure” refers to the rumored, informal, and unreported earnings per share (EPS) projections of investors and financial advisers.
  • This service of sharing whisper numbers caters to the most prized and wealthy clients of a brokerage.
  • Whisper figures can be beneficial if they originate from a trustworthy source and deviate from analyst forecasts.
  • The whisper number is what traders believe, have acted on, or will act on. Hence market prices frequently fluctuate according to this figure.

Whisper Number Explained

A whisper number is an undisclosed figure that several people predict the firm will produce, irrespective of the consensus projections. Financial analysts that track a certain firm will eventually issue their official profits forecast for the subsequent quarters. A “consensus earnings estimate” is created by taking the individual numbers provided by many analysts that follow the firm and averaging them together.

Many companies make it a point to decrease analyst forecasts for upcoming quarters to exceed such estimates. When expectations are surpassed, it often causes a stock to trade at a higher price.

When the whisper numbers differ from the analysts’ consensus forecast, they may be informative. Such numbers are utilized to aid in detecting (or preventing) an earnings shock (or discontent). Although, this only has any bearing on the discussion if their estimate is more precise than the average estimate. Nobody knows until the official announcement is made which of the two predictions, the whisper number or the consensus prognosis, is the more accurate one.

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Examples

To better understand the concept, let us look at the examples of the whisper number.

Example #1

For instance, if a firm is expected to report a profit of $2 per share for a quarter based on the consensus earnings estimate of analysts, but the whisper figure is $3. Shares of that company would likely increase before the publication of the results. Following an increase in the stock’s price in expectation of the outcome, the price of the firm’s shares may drop once the actual figure is made public.

This occurs after the price of the shares has previously risen. Most people would be taken aback if the results came in at $4, which would cause the stock to surge. Conversely, if the profit per share comes in at $2, which meets the consensus projection but is lower than the whisper number, the share will likely go down in price.

Example #2

Writing from Entrepreneur examines Walmart and Target; both are large stores. Both companies’ stock values fell to multi-year lows because of shifts in consumer spending brought about by inflation.

These companies were planning to publish their quarterly results. While carrying out their study, they also consider the Whisper number, which, in their opinion, represents a forecast in which certain experts have complete trust but do not discuss it publicly. Walmart and Target have a below-expectation whisper number, an unofficial statistic that often comes before formal forecasts.

Interpretation

Traders want an advantage over others, and being the one with information of a whisper number implies enjoying the first chance to invest based on this data. Generally, this service is designated for a brokerage’s most valuable (rich) customers. A pattern of “whisper numbers” is discussed just before publishing a business’s earnings per share data, typically accompanied by an increase in the company’s share price.

The total revenue similar to or exceeds the whisper number might result in profits from trading, while a weak or upsetting profit figure that follows results could mean that share values fall.

The type of investor is the primary factor determining how much one should pay attention to a whisper. The whisper number is pretty trivial for a long-term investor having a buy-and-hold perspective. The price movement during earnings season will, over time, be nothing more than a little blip for them. On the other hand, for an active investor, a whisper can be a far more useful instrument as they hope to profit from share price swings during earnings season.

In the past, unreported EPS estimates rumored to be circulating on Wall Street were referred to as “whisper numbers.” These days, “whisper figures” are more likely to represent the aggregate guess of individual traders. An accurate “whisper number” may be particularly helpful for active traders in the market over the short term. Of course, investing approach will determine the level of importance that could be placed on this aspect. Whisper numbers are another technique serious traders should consider using; however, it does not always turn out right.

Frequently Asked Questions (FAQs)

What is an Earnings Whisper number?

Earnings whisper number reflects per share (EPS) projections experienced traders and fund managers make are known as “whisper numbers.” These numbers are unofficial and have not been published but are rumored to be accurate. Additionally, the whisper number can be used for any data or news released in any market.

How accurate is earning whisper number?

Earnings Whisper has been the most accurate published estimate 71.6% of the time in the previous 24 years. It has been hedging funds, asset managers, brokers,’ individual investors, and traders’ favorite resource for estimates for 24 years.

What is a stock whisper number or price?

A publicly-traded firm may have a “whisper figure,” which is an unofficial estimate of its profits per share that has not been announced. The stock whisper number is supplied by investors and wealth managers on Wall Street. Additionally, the whisper number can be used for any data or news released in any market.

This is a guide to What is Whisper Number. Here, we explain the concept in detail, including its interpretation and examples. You may also find some useful articles here:

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