In October 2021 we published our 21Q3 earnings surprise candidates based on StarMine predictive analytics. Using the Russell 1000 Index as our universe, our 21Q3 earnings surprise predictions scored 90% correct. The StarMine SmartEstimate®  is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our research has shown that when the SmartEstimate® differs significantly from the consensus (I/B/E/S Mean), the Predicted Surprise accurately predicts the direction of earnings surprises or further revisions 70% of the time. When significant Predicted Surprise for revenue is also present for the period, the accuracy improves to 78%.

As we enter 21Q3 earnings season, market participants and analysts are noting the blistering pace of earnings growth and the record percentage of companies beating analyst expectations. The key question is, can this momentum be maintained? The current 21Q3 earnings growth rate of 29.4% will certainly mark the beginning of a transition to more reasonable year-over-year (YoY) growth rates off the back of a historical 21Q1 and 21Q2 earnings season where YoY earnings growth was 52.8% and 96.3% respectively. This is shown in Exhibit 1. Exhibit 1: S&P 500 YoY Growth Rates Of the 17 companies that have reported thus