Research On The Validity Of Analysts' Earnings Forecast In Information Technology Industry Based On Cost Stickiness

In China's securities market,information asymmetry between investors and enterprises is high.As a participant in the securities market,financial analysts can help investors to make decisions by giving the earnings forecast information to improve the information asymmetry and improve the efficiency of the securities market.The existence of cost stickiness will affect the validity of financial analysts' earnings forecasts and weaken their mediating role.Therefore,this paper puts forward the mechanism of the impact of cost stickiness on the validity of the earnings forecast of financial analysts by combing the relevant literature.This paper makes an empirical study on the relationship between the cost stickiness and the validity of the earnings forecast of the financial analysts by taking the empirical data of the 2009-2016 year in information technology industry listed companies of the two securities market in Shenzhen Shanghai as the sample.The results show that the cost stickiness is negatively related to the validity of the earnings forecast of financial analysts.The higher level of cost stickiness,the lower accuracy of earnings forecast of financial analysts,the possibility of the financial analysts to distinguish correctly the difference of the earnings composition is weakened.In the combination of low cost stickiness and medium cost stickiness,the results of financial analyst forecast can reflect the continuity of cash flow rate higher than that of accrued profit.In the high cost sticky combination,the result of earnings forecast of financial analyst is opposite,which will overestimate the sustainability of accruals,and the validity of the earnings forecast is poor.Further research shows that the earnings forecast of financial analysts can reflect the sustainability of the non-manipulative accruals more than the maneuverability accrued profit only in the low cost sticky combination.In the medium and high cost sticky combination,the earnings forecast can not correctly distinguish the difference in the sustainability of accrued profits.The conclusion of this paper enriches the research on the economic consequences of the cost stickiness,and provides an idea for the financial analysts to improve the validity of earnings forecast.At the same time,it is suggested that investors make rational use of the earnings forecast report to make investment decisions.