Investing based on professional analyst's earnings per share (EPS) revisions is an investment strategy that involves picking stocks which are deemed to have a higher quantity of upwardly revised estimates than the average of the sector or that of historical levels.

What does revisions mean in stocks?

Stock prices of firms with downward revisions show below-average performance after the adjustment. Changes in estimates reflect changes in expectations of future performance. Perhaps the economic outlook is better than previously expected, or maybe a new product is selling better than anticipated.

What are earning revisions?

“An earnings-revisions investment strategy is based on empirical evidence that stocks with earnings forecasts that were recently upgraded by analysts tend to outperform, while stocks with negative earnings revisions tend to underperform,” explains Huij.