Earnings are 50/50 chance
To get earnings typically you take out all expenses and subtracts it from revenue.
But remember that stock prices move based on market expectations. A 20-percent increase in quarterly income may not be seen as positive if market expectation is 40 percent. In the same way, a 10 percent decrease in earnings may cause a stock to go up if the expectation is a much larger decline.
This also puts in the factor of what the companies outlook is for the next quarter or how their yearly earnings will be affected. So there is little correlation between stock prices and earnings growth results. Stock brokers use a consensus of earnings estimates made by research analysts in the market, where the median estimate becomes the basis for comparison. But you can also use earnings guidance from listed companies to estimate your own target.
Just because some stocks tumbled due to disappointing earnings doesn’t mean that they are not good investment anymore. In fact, they can be an attractive buying opportunity for as long as the fundamentals remain sound. Take for example $Duck Creek Technologies Inc(DCT.US$ it’s clearly an overreaction. It’s usually best practice tho to wait 3 days after its initial fall before investing to make sure that it’s closest to its support. The worst loss I have ever suffered was because of holding thru earnings, damn $Microvision(MVIS.US$, so I made it a personal rule of mine to not hold during ER. The size of a company must also be considerded because market reactions to earnings report are stronger at companies with bigger market capitalization because institutional investors, when they react to surprises, can dictate the short-term direction of any stock due to the sheer size of their investments.
But remember that stock prices move based on market expectations. A 20-percent increase in quarterly income may not be seen as positive if market expectation is 40 percent. In the same way, a 10 percent decrease in earnings may cause a stock to go up if the expectation is a much larger decline.
This also puts in the factor of what the companies outlook is for the next quarter or how their yearly earnings will be affected. So there is little correlation between stock prices and earnings growth results. Stock brokers use a consensus of earnings estimates made by research analysts in the market, where the median estimate becomes the basis for comparison. But you can also use earnings guidance from listed companies to estimate your own target.
Just because some stocks tumbled due to disappointing earnings doesn’t mean that they are not good investment anymore. In fact, they can be an attractive buying opportunity for as long as the fundamentals remain sound. Take for example $Duck Creek Technologies Inc(DCT.US$ it’s clearly an overreaction. It’s usually best practice tho to wait 3 days after its initial fall before investing to make sure that it’s closest to its support. The worst loss I have ever suffered was because of holding thru earnings, damn $Microvision(MVIS.US$, so I made it a personal rule of mine to not hold during ER. The size of a company must also be considerded because market reactions to earnings report are stronger at companies with bigger market capitalization because institutional investors, when they react to surprises, can dictate the short-term direction of any stock due to the sheer size of their investments.
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jake Nho : The stock price trend of a company is a market behavior, and the stock price fluctuation is affected by multiple factors such as the macro environment, operating performance, and market expectations.
Cat army : @Tupack H Mcsnacks sir I am holding tesla 950calls and it has become half. Even after good earning tesla opening seems to be down. Expiry of my calls is 10/29. Should I sell it first thing in the morning
Mcsnacks H TupackOP Cat army: A lot of insiders have been selling. That’s not a good thing
Moooooo888 : Sir, any cheap but potential share can recommend? Thanks
Daniel Zn : Will u hold ccxi through earnings?
Johnnie Worker : Let’s just roll the dice man
fionaa : where are u now？
Bernard With Bacon fionaa: I miss him too
MoMa Doge : Master@Tupack H Mcsnackshow are you? Realized that you didn’t show up for days. Hope you are fine. God Bless