A reminder as we head into earnings season. It does not matter how much a company grows or expands margins YoY or QoQ. What matters is how the company performs & guides relative to consensus.

Stocks are priced based on the PV of its expected future CFs, not past CFs. Key word being “expected”. When those expectations change, the stock price follows LT.

However, immediate price action is not directly positively correlated to beating or missing consensus. Directional LT bets are easier to make.