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.
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Conor Mac's avatar
“But it went up 100% YoY” will never get old.
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Gaurav Kotak @ Fincredible's avatar
So true! What matters also imho is the reasons for the miss. e.g. I don't think $SNAP would have lost a quarter if it's market cap if it wasn't for the potentially structural concerns related to Apple privacy change
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Gaurav Kotak @ Fincredible's avatar
As a side note, I really like companies giving comps to both 2020 and 2019, esp for companies significantly rollercoastered due to pandemic
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