Study Finds More Active Investors Rely on Non-GAAP vs. GAAP Reporting in Analyzing Stocks

Written By Elizabeth Saunders, Partner

October 13, 2017

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Results Suggest SEC-Mandated Rules on Emphasizing GAAP Largely Ignored by Investors

CHICAGO, Oct. 16, 2017 – Clermont Partners announced today the results of a proprietary survey designed to reveal how active (not passive) investors factor GAAP and non-GAAP measures, intangible assets and non-financial metrics into their stock selection process. The survey was conducted to learn more specifically how the Street uses company-reported and SEC-mandated metrics, and provide insights to help management teams better communicate with investors.

Key findings:

Almost three-quarters (74%) of respondents rely on non-GAAP more than GAAP reporting in evaluating a company’s performance. Forty-four percent of respondents believe that non-GAAP measures have become more important over time.
Most respondents (90%) will frequently make their own adjustments to a company’s GAAP results based on what they believe is relevant in evaluating performance.
Intangible assets are considered important factors in evaluating stocks for nearly two-thirds (64%) of the respondents.

The survey findings could come as welcome news for public companies’ management and investor relations teams. Despite the SEC’s support of GAAP metrics, one study found that 88% of S&P 500 companies presented non-GAAP measures in a recent quarter.[i]

“The results of our research suggest that non-GAAP metrics are viewed more favorably by active investors as they make buy and sell decisions on stocks. While regulators position GAAP reporting as the gold standard way to compare company against company, most survey respondents do not take GAAP at face value,” said Elizabeth Saunders, Partner at Clermont Partners.

Fifty-six investors, diversified across industry focus and investment styles, participated in the 14-question survey. The published report of the survey results provides extensive commentary from participants, as well recommendations for public company management teams based on the findings.

Full results of the study are available online at

About Clermont Partners

Clermont Partners is a value-driven strategic communications firm that helps companies break through market complexity and improve stakeholder messaging, investor engagement and equity value. For more information, please visit

For more information contact:

Tui Rademaker, Clermont Partners

[1] PwC’s Governance Insights Center. “What’s the big deal about using non-GAAP measures?” (2016)

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