Model Update
description: Update financial models with new data — quarterly
earnings, management guidance, macro changes, or revised assumptions.
Adjusts estimates, recalculates valuation, and flags material changes.
Use after earnings, guidance updates, or when assumptions need
refreshing. Triggers on "update model", "plug earnings", "refresh
estimates", "update numbers for [company]", "new guidance", or "revise
estimates".
Workflow
Step 1: Identify What Changed
Determine the update trigger:
- Earnings release: New quarterly actuals to plug
in
- Guidance change: Company updated forward
outlook
- Estimate revision: Analyst changing assumptions
based on new data
- Macro update: Interest rates, FX, commodity prices
changed
- Event-driven: M&A, restructuring, new product,
management change
Step 2: Plug New Data
After Earnings
Update the model with reported actuals:
| Line Item |
Prior Estimate |
Actual |
Delta |
Notes |
| Revenue |
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| Gross Margin |
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| Operating Expenses |
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| EBITDA |
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| EPS |
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| [Key metric 1] |
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| [Key metric 2] |
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Segment Detail (if applicable):
- Update each segment's revenue and margin
- Note any segment mix shifts
Balance Sheet / Cash Flow Updates:
- Cash and debt balances
- Share count (buybacks, dilution)
- Capex actual vs. estimate
- Working capital changes
Step 3: Revise Forward
Estimates
Based on the new data, adjust forward estimates:
|
Old FY Est |
New FY Est |
Change |
Old Next FY |
New Next FY |
Change |
| Revenue |
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| EBITDA |
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| EPS |
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Key Assumption Changes:
- What assumptions are you changing and why?
- Revenue growth rate: old → new (reason)
- Margin assumption: old → new (reason)
- Any new items (restructuring charges, one-time gains, etc.)
Step 4: Valuation Impact
Recalculate valuation with updated estimates:
| Valuation Method |
Prior |
Updated |
Change |
| DCF fair value |
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| P/E (NTM EPS × target multiple) |
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| EV/EBITDA (NTM EBITDA × target multiple) |
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| Price Target |
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Step 5: Summary & Action
Estimate Change Summary:
- One paragraph: what changed, why, and what it means for the
stock
- Is this a thesis-changing event or noise?
Rating / Price Target:
- Maintain or change rating?
- New price target (if changed) with methodology
- Upside/downside to current price
Step 6: Output
- Updated Excel model (if user provides the existing model)
- Estimate change summary (markdown or Word)
- Updated price target derivation
Important Notes
- Always reconcile your estimates to the company's reported figures
before projecting forward
- Note any non-recurring items and whether your estimates are GAAP or
adjusted
- Track your estimate revision history — it shows your analytical
progression
- If the quarter was noisy, separate signal from noise in your
estimate changes
- Check consensus after updating — how do your revised estimates
compare to the Street?
- Share count matters — dilution from stock comp, converts, or
buybacks can materially affect EPS