Great question! Magoosh has collected data from our students since we started in 2009, and, as a result, we have all kinds of information about how students our students have done on the GRE.
The score is predicted by getting feedback from previous students (their score on the actual GRE), comparing that to their performance on Magoosh practice problems (the number and difficulty of questions answered), and formulating a predicted score based on the resultant correlation. You can read more about that here, as well as about how the actual exam is scored here.
Again, we send a short survey to our customers after they take the GRE to get feedback and ask our users what their final GRE score was. We receive a lot of responses to our survey. We compare our customers’ actual GRE scores to their performance on Magoosh. Here’s a graph of partial results for both math and verbal:
Math
Verbal
One last thing: our estimated score feature is most accurate when you answer a lot of questions. We've found a very high correlation between our past users' actual GRE scores and their estimated score on Magoosh, especially when they answer a lot of questions (without resetting their stats).
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