How to use earning results to maximize profits
I am always very excited about the earnings season. It is time that the companies that I am vested in or on my watchlist gives me their report card. Being a fundamental and long term investor (ie. more than 5 years), I do not do any short term trades before the earnings are released. Instead, i use it to verify and check my thesis.
One good practice to do before the earnings are released is to have in your mind how this quarter earnings will be. I use a good old fashion way and write it down, or you can have it in your mind, In that case, you can have a good gauge how well you understand the business.
So what is a good earning results?
You can compare to the key metrics that you use to measure the company. Some of the obvious ones are:
Revenue
Earnings
Gross Margin
Operating Margin
Some could be more specific to the company. For eg. $Shopify (SHOP.US)$ , i would want to look at their Subscription Solutions Revenue and the Merchants Solutions revenue, Monthly Recurring revenue and the Net New Merchants.
In Q22021, $Shopify (SHOP.US)$ beat all of them but miss the net new merchants. So you may want to take note of that.
Very often when a company miss the estimate or reported slowing growth vs the precious quarter, its share price will drop. One example is that of $Zoom Communications (ZM.US)$ .
Most of these financials can be found in the company site. Moomoo has also made them available in the app.
One good practice to do before the earnings are released is to have in your mind how this quarter earnings will be. I use a good old fashion way and write it down, or you can have it in your mind, In that case, you can have a good gauge how well you understand the business.
So what is a good earning results?
You can compare to the key metrics that you use to measure the company. Some of the obvious ones are:
Revenue
Earnings
Gross Margin
Operating Margin
Some could be more specific to the company. For eg. $Shopify (SHOP.US)$ , i would want to look at their Subscription Solutions Revenue and the Merchants Solutions revenue, Monthly Recurring revenue and the Net New Merchants.
In Q22021, $Shopify (SHOP.US)$ beat all of them but miss the net new merchants. So you may want to take note of that.
Very often when a company miss the estimate or reported slowing growth vs the precious quarter, its share price will drop. One example is that of $Zoom Communications (ZM.US)$ .
Most of these financials can be found in the company site. Moomoo has also made them available in the app.
Another important aspect of the earning results is the transcript. Spend some time to read through the transcript to check if the growth story is still intact. For eg. In $Meta Platforms (FB.US)$ case, you can read from the transcript that the CEO is still very committed in building the metaverse.
Mark Zucherberg said about the metaverse:
“I think that overall this is one of the most exciting projects that we’re going to get to work on in our lifetimes.”
One earnings results will not sway or change my thesis totally. Some long term investor here such as @HopeAlways will probably agree with that.
In the coming Q3 results, I am looking forward to see some companies such as newly IPO $Ginkgo Bioworks (DNA.US)$, e-commerce $Sea (SE.US)$ and $Upstart (UPST.US)$ . $Upstart (UPST.US)$ has been adding new banks as their
partner. I am excited to see how this changes the concentration.
Happy investing and good luck.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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HopeAlways : Deep and insightful![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Panda2102 OP HopeAlways : Learning from you senpai
HopeAlways Panda2102 OP :