One in Four U.S. Companies Now Lack Analyst Coverage

A quarter of U.S.-listed companies now have zero analyst coverage, a share that is rising and causing wider spreads, lower prices, and reduced investor demand due to information asymmetry. The average market cap of uncovered firms is about $230 million, while every Nasdaq-100 company has coverage, some with over 60 analysts. Shrinking commissions, passive investing, unbundling, and consolidation have made small-cap research unprofitable. As the SEC pushes to revive IPOs, restoring analyst coverage economics deserves consideration to keep markets efficient for all companies, according to Nasdaq's chief economist and a U.S. economist.