Weekly Wins: Do earnings 'Beats' and 'Misses' really matter?
$NVIDIA (NVDA.US)$ posted another quarter of record sales, beating expectations for six straight quarters.
Excitement about the metaverse has lifted Nvidia stock to record highs. It has been on a big run, with shares up more than 124% as of Wednesday's close price, which is continuing after the earnings release.
Key takeaways(VS Refinitiv consensus):
Earnings: $1.17, adjusted, versus $1.11 expected, up 60% year over year
Revenue: $7.10 billion versus $6.82 billion expected, up 50% year over year
Nvidia said it expects to report around $7.4 billion in the current quarter, ending in January, higher than analyst expectations of $6.86 billion.
Earnings: $1.17, adjusted, versus $1.11 expected, up 60% year over year
Revenue: $7.10 billion versus $6.82 billion expected, up 50% year over year
Nvidia said it expects to report around $7.4 billion in the current quarter, ending in January, higher than analyst expectations of $6.86 billion.
Why earnings matter
Investors should place a high priority on company earnings reports.
That's because earnings reports reveal the ingredients needed to generate a company's profits,
which usually leads to a higher stock price.
which usually leads to a higher stock price.
Usually, we pay attention to a company's short-term performances but need to weigh them in a
longer-term context.
longer-term context.
Do earnings Beats/Misses matter?
Generally speaking, an earnings report is a short-term stock price catalyst. Beating the expectation could lead to stock rising in most cases because it's a sign of strong operating performance.
However, it's important to note that stock price fluctuations can be based on a variety of
factors, many of which go beyond earnings reports. An earnings beat doesn't always mean shares will rise, just as a miss doesn't always imply shares will fall.
However, it's important to note that stock price fluctuations can be based on a variety of
factors, many of which go beyond earnings reports. An earnings beat doesn't always mean shares will rise, just as a miss doesn't always imply shares will fall.
Sometimes, other information released alongside earnings could result in a stock moving in a the direction that wasn't expected.
In Nvidia's case, core operating indicators and industry momentum are critical to its stock price surging.
Selecting a good stock with fair prices is never easy. That's why we need to do financial analysis and find clues of the company's operations.
Direct access to How to reading earnings on moomoo:
Spoiler alert:
In the following weeks, moomoo Courses will unveil a new series of courses on
How to invest in stocks: A Quick Start Guide, which will detail different methods and strategies on stock selection.
[Weekly Wins]
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