Outperform


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Outperform

In general, this means to do better than some particular benchmark. Mutual Fund XYZ is said to outperform the S&P500 if its return exceeds the S&P500 return. However, this language does not take risk into account. That is, one might have a higher return than the benchmark in a particular year because of higher risk exposure. Outperform is also a term used by analysts to describe the prospects of a particular company. Usually, this means that the company will do better than its industry average. Related: underperform.

Market Outperform

A broker's or brokerage firm's rating of a security. Such a security is expected to do marginally better than the market as a whole for the period of time it holds the "market outperform" rating. Some firms call the rating "accumulate," "moderate buy," or simply "outperform." Different firms have different rating systems, but "market outperform" is usually one rating above "market perform" or "neutral," and one rating below "buy." For example, if the market is expected to go down slightly, but a certain company's fundamentals are thought to be sound, a brokerage firm might change that company's rating from market perform to market outperform.