Earnings rating is calculated based on three factors - earnings surprises, estimate revisions and recommendation changes. Comparing company’s actual earnings to the mean expectation of analysts results in a difference which is referred to as ‘Positive’ or ‘Negative Surprise’. The report takes into account surprises from the past 4 quarters. Estimate revisions are the number of up and down revisions in earnings per share of the company by the analysts and the average percentage change of those revisions.
