What does outperform mean?

Asked by: Dean Portillo

Is an outperform rating good?

The most common use of outperform is for a rating that is above a neutral or a hold rating and below a strong buy rating. Outperform means that the company will produce a better rate of return than similar companies, but the stock may not be the best performer in the index.

What does outperform mean when it comes to stocks?

Outperform: Also known as “moderate buy,” “accumulate,” and “overweight.” Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.

What is difference between outperform and buy?

Buy: Sometimes called “strong buy,” a buy rating is bullish and implies that the stock is likely to perform very well. Outperform: Also termed “overweight” or “moderate buy.” Outperform is a mild buy rating and implies that the stock is likely to have higher returns than the overall stock market.

What is better outperform or overweight?

Outperform is similar to overweight. An outperform stock is right below a buy stock in level of recommendation. It is expected to offer a better return than an index or the stock market overall. Some analysts will use “outperform” in place of “overweight.”

Should you buy underperforming stocks?

Be cautious about buying underperforming stocks

If you’ve assessed the damage and determined that it’s cosmetic rather than crippling, you might be tempted to average down – that is, buy more shares at a lower price, reducing your average purchase cost. Taylor says you should resist that urge.