Clarity Q2 - MAG-7 and CVNA/CDLX Forecasts vs Results
As you may or may not know, I’ve been tinkering with Clarity over the course of the year. The goal has been to see how well my Twitter/Substack followers can predict company KPI’s. It’s been fun comparing predictions with typical alternative data coverage to see how accurate we can get users vs the standard ~$20k per year Yipit subscription.
If you take a look at the site you’ll see a significantly revamped UI is in the works as we begin taking the project a bit more seriously. The end game (ideally) is that if users are submitting frequent predictions, we can provide a liquid and transparent view into market expectations of core KPI’s for a variety of stocks.
Essentially, we want to provide users with Yipit level accuracy, without the Yipit level price tag. An ambitious goal to be sure, so we’ll see how it goes.
As for the Q2 results we spiced it up a bit. For Q1 we just asked for revenue estimates and provided sell-side expectations, this time we additionally asked 1 KPI question per company, similar to what’s in the image above. Our view is that many stocks trade on alt data surrounding KPI’s, so why not try and provide some more visibility into that space?
First we’ll go over revenue forecasts:
The companies we asked about were MAG-7 (sans AMZN) and CVNA/CDLX. Here’s the comparison between users, sell-side, and actuals.
AAPL: Users: $83.4b (-2.1%) — Sell-side: $84.5b (-1.5%) — Actual: $85.8b
MSFT: Users: $65b (+0.5%) — Sell-side: $64.4b (-0.5%) — Actual: $64.7b
GOOGL: Users: $84b (-0.2%) — Sell-side: $84.3b (+0.1%) — Actual: $84.2b
TSLA: Users: $23.8b (-6.5%) — Sell-side: $24.12b (-5.4%) — Actual: $25.5b
NVDA: Users: $29.9b (-0.3%) — Sell-side: $28.7b (-4.3%) — Actual: $30.0b
META: Users: $39.0b (-0.2%) — Sell-side: $38.3b (-1.9%) — Actual: $39.1b
CVNA: Users: $3.37b (-1.2%) — Sell-side: $3.23b (-5.3%) — Actual: $3.41b
CDLX: Users: $78.3m (+12%) — Sell-side: $75.4m (+7.8%) — Actual: $69.6m
Average Difference: Users: 2.9% — Sell-side: 3.4%
Decently impressive work to once again see users in aggregate out-performing sell-side estimates. Sample sizes are certainly low given the limited pre-launch test, but I am proud of you guys.
The trends from Q1 also repeated themselves. CDLX users were way too bullish, but sell-side was also far off. TSLA remained the most off for the MAG-7. Users were quite dialed in on CVNA (perhaps skewed by my own coverage?). AAPL/MSFT/GOOGL clearly have very tight estimates, unsurprising given the more mature IR functions.
Overall for revenue the results are consistent with what I expected. It’s been shown a couple times that user submissions can compete with or beat sell-side estimates. We hope to see similar behavior as we try and scale up.
Our KPI questions were lower in submissions and didn’t have the anchor of analyst estimates. Some examples of our results.
META DAP: Users: 3.3b (+0%) — Actual 3.3b
CDLX Billings: Users: $117.5m (+6.4%) — Actual $110.4m
MSFT Cloud Growth: Users: 22% (-4%) — Actual 23%
GOOGL Cloud Growth: Users 28% (-3%) — Actual 29%
CVNA Retail Sales: Users 104k (+2.5%) — Actual 101k
TSLA Deliveries: Users 421k (-5.2%) — Actual 444k
AMZN AWS Growth: Users 19% (+1.1%) — Actual 18.8%
Some like AAPL iPhone revenue had some non-sensical responses. Providing an anchor for those types of questions via sell-side consensus is likely beneficial so people know vaguely what to predict.
What’s interesting is that for some of these questions like AWS Growth and CVNA Units the user predictions actually fell inside typical alt data coverage ranges. This is a small sample size of 1 quarter, so we need to prove out replicability, but if that is something users can consistently do, it’s pretty compelling.
Fin:
Happy to have run this experiment with everyone’s participation. Winners will get an email shortly (this quarter was $100 and an
subscription). We hope to drastically increase prize pools and participation through the end of the year as we expand the platform.If you have any feedback or would like to discuss anything related to Clarity, feel free to reach out to @IndraStocks on Twitter. Democratizing access to alternative data and market consensus is something we’re very committed to.
Cheers and feel free to follow Clarity on Twitter as we continue to expand the platform.