Header Ads

Bullish Upcoming Earning Plays $10-$100 Price Range

What Are Earnings: Earnings typically refer to after-tax net income, sometimes known as the bottom line or a company's profits. Earnings are the main determinant of a company's share price, because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. Earnings are perhaps the single most important and most studied number in a company's financial statements. It shows profitability compared to analyst estimates, the company's own historical performance, and relative to its competitors and industry peers.

How Earnings Are Used: Earnings are the amount of profit that a company produces during a specific period, which is usually defined as a quarter (three calendar months) or a year. Every quarter, analysts wait for the earnings of the companies they follow to be released. Earnings are studied because they represent a direct link to company performance.
Earnings reported that deviate from analysts' expectations can have large impacts on stock price. For instance, if analysts on average estimate that earnings will be $1 per share and they come in at just $0.80 per share, the price of the stock is likely to fall on that miss.
A company that beats earnings estimates is considered to be outperforming its peers. Thus, the CEO may be praised and the board may pat itself on the back. A company that consistently misses earnings estimates is considered to be under-performing relative to its peers, so the CEO will be blamed and the board may elect new officers.

No comments