underperform

verb un·der·per·form \ ˌən-dər-pər-ˈfȯrm , -pə-ˈfȯrm \
Updated on: 10 Nov 2017

Definition of underperform

transitive verb
:to do worse than
intransitive verb
:to fail to do as well as expected

underperformance

play \ˌən-dər-pər-ˈfȯr-mən(t)s, -pə-ˈfȯr-\ noun

underperformer

noun

Examples of underperform in a Sentence

  1. The report shows which schools are underperforming.

Recent Examples of underperform from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'underperform.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of underperform

1971


Financial Definition of UNDERPERFORM

underperform

What It Is

The term underperform refers to an analyst recommendation that a stock is expected to do slightly worse than the overall market return.

How It Works

Analysts regularly evaluate and project stock performance.  Analysts may provide this service on behalf of a particular brokerage house, or for private clients, or even for public dissemination through reports and investment publications.    Analysts will evaluate the financial conditions of an underlying security and any competitive information available about the industry.  Based on this analysis, a stock may be described along a range from the lowest rating, "strong sell," (i.e. not expected to perform well or recover) to the highest rating, "strong buy" (i.e. big performance gains expected).  Analysts generally use the term "underperform" to refer to a stock that is fundamentally stable, but expected to perform below the market or industry sector to which the stock belongs.   The category “underperform” is alternatively referred to as "moderate sell" or "weak hold."

Why It Matters

Investors can gather valuable information from analysts' recommendations about particular stocks.  Not all analysts' recommendations are consistent or based on the same measures of a company's activities or expected performance.  Understanding and weighing varying recommendations is an important part of an investor's work.


UNDERPERFORM Defined for English Language Learners

underperform

verb

Definition of underperform for English Language Learners

  • : to be less successful than expected or required


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