Model Update

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:

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:

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:

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

Hermes Profile Notes

This skill was packaged from pi-financial-services source path plugins/vertical-plugins/equity-research/skills/model-update for the Hermes financial-services profile. Use institutional data connectors first when available, cite sources, and stage outputs for qualified human review.

Common Pitfalls

1. Do not present drafts as investment, legal, tax, or accounting advice.
2. Do not use web search as the primary source when an institutional MCP/data connector is available.
3. Do not execute transactions, contact clients, post to a ledger, or approve onboarding. Stage outputs for review.

Verification Checklist

• Inputs, assumptions, dates, and currencies are explicit.
• Numbers tie across tables, models, decks, and memos.
• Sources are cited and institutional data is preferred where available.
• Output is labeled draft / for human review where appropriate.