An estimate is really just an analyst's projections about corporate financial health and the predictions often vary significantly. Estimates are influenced by company philosophy, individual analysts perspectives, psychological baggage from being wrong in the past, and the desire by most to stay fairly close to consensus numbers (being much different on your numbers carries a risk).
The truth is, despite efforts to the contrary, earnings projections are invariably tainted with a degree of bias and subjectivity; they are not perfectly objective.
To assume these numbers are wise and accurate without carefully assessing the context in which these decisions are made would be a mistake. But thats exactly what most investors do.
This is not to say that analysts estimates are not a valuable tool in assessing the attractiveness of investment; they are an important component of the decision process.
And in the end, prices of assets are measured based on current and future cash flow. Estimates come from professionals doing their best to be objective and are helpful in assessing the cash flow outlook for companies.
That effort should be respected (and cautiously digested) as long as one recognizes that there are no perfect outcomes; bias always exists.
So as an investor, carefully think through the philosophy underpinning recommendations and projections. Don't optimistically trust without thoughtful reflection.
Ronald Reagan once said about the then Soviet Union, that he was willing to "trust" but only with simultaneous verification The former president knew that it was important to be academic in perspective, hopeful in expectations, and to avoid trusting blindly.
Take the same advice as you watch earnings season this quarter. It will help you make sense of the numbers, the market's reaction, and what your next moves should be as an investor.
Trust but verify; a healthy perspective and one that can benefit you as an investor.