Eargo (EAR) Predictability Rank

View and export this data going back to 2020. Start your Free Trial

What is Eargo Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Eargo Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

Eargo Predictability Rank Related Terms

Thank you for viewing the detailed overview of Eargo's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Eargo (EAR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Eargo Inc (NAS:EAR) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

2665 North First Street, Suite 300, San Jose, CA, USA, 95134

Website

https://www.eargo.com

Eargo Inc is a medical device company, focused on improving the quality of life of people with hearing loss. The company offers hearing aids, professional support services, and other insurance-related services through a direct-to-consumer format with a personalized, consumer-centric approach. The product portfolio includes Eargo Neo HiFi, Eargo 5, Eargo 6, Eargo 7, and related accessories.

Executives

Mark Thorpe	officer: Chief Accounting Officer	C/O EARGO, INC., 2665 NORTH FIRST STREET, SUITE 300, SAN JOSE CA 95134
William Brownie	officer: Chief Operating Officer	C/O EARGO, INC., 2665 NORTH FIRST STREET, SUITE 300, SAN JOSE CA 95134
Adam Laponis	officer: Chief Financial Officer	C/O EARGO, INC., 2665 NORTH FIRST STREET, SUITE 300, SAN JOSE CA 95134
Christian Gormsen	director, officer: President and CEO	C/O EARGO, INC., 2665 NORTH FIRST STREET, SUITE 300, SAN JOSE CA 95134
Trit Garg	director	C/O PATIENT SQUARE EQUITY ADVISORS, LP, 2884 SAND HILL ROAD, SUITE 100, MENLO PARK CA 94025
Afshin Justin Sabet-peyman	director	C/O PATIENT SQUARE EQUITY ADVISORS, LP, 2884 SAND HILL ROAD, SUITE 100, MENLO PARK CA 94025
Onkarr Narula	director	C/O PATIENT SQUARE EQUITY ADVISORS, LP, 2884 SAND HILL ROAD, SUITE 100, MENLO PARK CA 94025
Donald J Spence	director	C/O OAKMONT ACQUISITION CORP., 33 BLOOMFIELD HILLS PARKWAY, SUITE 240, BLOOMFIELD HILLS MI 48304
Psc Echo Gp, Llc	10 percent owner	2884 SAND HILL ROAD, SUITE 100, MENLO PARK CA 94025
Psc Echo, Lp	10 percent owner	2884 SAND HILL ROAD, SUITE 100, MENLO PARK CA 94025
David James Wu	director	411 FIRST AVENUE SOUTH, SUITE 600, SEATTLE WA 98104
Nina Richardson	director	C/O SILICON LABORATORIES, 400 W CESAR CHAVEZ, AUSTIN TX 78701
Katie J Bayne	director	C/O EARGO, INC., 2665 NORTH FIRST STREET, SUITE 300, SAN JOSE CA 95134
Geoff Pardo	director	26 TECHNOLOGY DRIVE, IRVINE CA 92618
Gilde Healthcare Holding B.v.	10 percent owner	NEWTONLAAN 91, PO BOX 85067, 3508 UTRECHT P7 AB