Sentiment Analysis
Condense the company's investor communication into one number. Easily compare any company's sentiment over time and against peers
Sentiment in Action
Financial analysis has long focused on numbers. Analysts evaluate revenue, margins, cash flow, and balance sheets. They build models, run multiples, and calculate discounted cash flows. Tools evolved from Lotus 1-2-3 to Excel, from Bloomberg terminals to alternative data platforms. The result is a robust set of methods for measuring numbers.
Sentiment scores can range from 0-100, with 0 being the most negative and 100 being the most positive score. The sentiment score is updated daily.
Yet qualitative analysis at scale remains. Management guidance, annual reports, and prepared remarks carry information that numbers alone cannot capture. Language signals confidence, caution, or hesitation. This is where sentiment analysis matters.
Moving Beyond Just Counting Words
Earlier attempts at sentiment analysis were basic. Analysts counted “good” and “bad” words in filings or calls. Some built dictionaries of negative and positive terms. Others pulled Twitter data to calculate crude sentiment scores. These approaches lacked context and nuance.
Modern large language models change this. They process text as a whole, weighing relationships between words and phrases. They detect subtle changes in tone across company communications. They make it possible to distill sentiment into a score that reflects management’s outlook.
How it Helps Investors
- Converts company investor communication into a single score between 0 and 100
- Tracks sentiment over time and across peers
- Normalizes scores across industries for fair comparison
- Updates daily
Complimentary to Traditional Research
Sentiment analysis does not replace fundamental analysis. It complements it. Used with revenue, cash flow, and valuation metrics, it provides a more complete picture of a company. It highlights where management sentiment diverges from expectations. It helps identify opportunities and risks that raw numbers may miss.
Take a look at the sentiment analysis of some of the top companies in the stock market, straight from the Marvin Labs platform.
Related Resources
Methodology in the Knowledge Hub
Practical Use Cases in the Knowledge Hub
Historical Developments in the Knowledge Hub
Performance Evaluation in the Knowledge Hub
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