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Prediction Markets Are Better than Humans as Earnings Analysts?

Steve LeCompte | | Posted in: Fundamental Valuation, Investing Expertise

Key Insight

Polymarket earnings-beat probabilities were closer to realized beat rates than analyst consensus (mean implied beat probability 73.7% vs 43.9% for analysts; actual beat rate 75.9%; 469 firm-quarter contracts, Sep 2025–Feb 2026; short, small sample).

Are prediction markets better at forecasting firm earnings than professional analysts? In their April 2026 paper entitled "Beating the Earnings Game: Why Do Prediction Markets Outperform Professional Analysts?", Daniel Rabetti, Jiaqi Shao and Che Zhang investigate whether and, if so, why a blockchain-based prediction market such as Polymarket outperforms professional analysts in forecasting U.S. stock earnings. The earnings predictions of this market are public and unchangeable contracts, taking the form:

"Will [Company] beat earnings for [Quarter] [Fiscal Year]?"

relative to analyst consensus as of contract creation date. Using data for 469 Polymarket firm-quarter earnings beat contracts, corresponding analyst earnings forecast data and associated daily stock prices during September 2025 through February 2026, they find that:

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Further Reading

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