This paper examines whether earnings smoothing based on accounting discretion is positively associated with value when less information is otherwise available. We estimate a smoothing index which measures the decrease in earnings per share volatility related to the use of discretionary accruals, and proxy for a firm’s information environment using the number of analysts following the firm. In unconditional tests, we find a modest though statistically significant premium for firms that smooth earnings. However, consistent with our hypothesis, we find that this premium is concentrated among firms with low or no analyst following. On average, we find no relation between firm value and earnings smoothing for firms with a high analyst following. These findings are consistent with findings that earnings smoothing increases the informativeness of earnings.