NVDA
NVIDIA
-- 128.910 TSLA
Tesla
-- 440.130 MU
Micron Technology
-- 103.900 QUBT
Quantum Computing
-- 25.680 PLTR
Palantir
-- 71.510 Summary of key points to look at first in the earnings report for US stocks
It is not realistic for beginners or busy people to read the entire financial statements from corner to corner. In order to efficiently understand the earnings reports, the key points to look at first have been summarized!
1. Expansion of revenue (sales)
The expansion of revenue (sales) is proof of earning power. To determine the momentum of company growth, let's look at the trend of revenue. The higher the growth rate of revenue compared to other companies in the same industry, the greater the potential for growth in that company. Products and services of companies with significant revenue growth often have strengths that other competitors do not have.
2. Look at the growth of net profit through EPS!
Net profit is the profit remaining after deducting all expenses from the money earned by the company. Whether the net profit is growing or not is a key point to evaluate the company's growth, which should be considered together with the expansion of revenue.
Furthermore, it is important to compare the growth of net profit with the growth of revenue. If the growth rate of net profit exceeds the growth rate of revenue, it indicates an increase in the company's profitability, which can be good news for investors.
In earnings reports, please look at EPS (Earnings Per Share).
For Japanese investors who are not familiar with the earnings of US stocks, it may seem difficult that net profit is ultimately shown as EPS. I recommend getting used to it by looking at summaries of the earnings of major US companies for a few quarters!
Comparison between actual results and financial estimates by analysts.
Let's see how much deviation there was by comparing the actual results of revenue and EPS with the analysts' estimates.In earnings reports, most of the information is summarized in the form of actual results and estimates. Analysts make consensus estimates on the revenue and net profit (EPS) of large companies before the earnings announcements.
If revenue and EPS exceed the consensus estimates, investors may respond positively, causing a short-term rise in the stock price. Conversely, if the actual numbers fall below expectations, it may serve as a factor for a decline in stock price.
It is also useful to look at how the actual revenue announced has evolved compared to the same period of the previous year.
4. Guidance for the next period vs. analyst estimates
Some companies may disclose guidance (revenue forecasts) for the next quarter at the time of earnings announcements.
If the guidance exceeds analyst expectations, there is a possibility that the stock price will rise in the short term. Conversely, if the guidance is below expectations, it could be a factor in the decline of the stock price.
It is important to note that for short-term price movements, future expectations are more important than current performance.
Among earnings, EPS, and guidance, guidance is particularly important in guiding future expectations.
Did you understand the importance of comparing analyst estimates with actual results in all of these points?
Lastly, please remember that the growth rate of earnings and net profit is based on actual figures and may already be factored into the stock price at the time of earnings announcements.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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いぬ : I see. this is it! On top of that, it would be nice to look at the whole thing. I'm doing the opposite, myself.