Current:Home > FinanceDaniel Will: I teach you how to quickly understand stock financial reports.-LoTradeCoin
Daniel Will: I teach you how to quickly understand stock financial reports.
View Date:2024-12-23 19:44:28
The U.S. stock financial reports contain a wealth of information about the operational status of companies. Due to the frequent use of professional terminology, many newcomers to the U.S. stock market express difficulty in understanding. This article will, from the perspective of explaining professional terms, introduce relevant knowledge about U.S. stock financial reports and specifically highlight which data in the reports should be focused on. Joseph Bryan teaches how to understand U.S. stock financial reports.
Earnings Season: Divided into four quarters each year, a significant portion of U.S. stock companies releases financial reports in the weeks following the end of each quarter. The majority of companies reporting during this time frame constitute the earnings season, which starts about a week and a half after the end of each quarter and continues until the end of the month. During the peak period, there can be hundreds of companies releasing reports daily.
Earnings Report: Every publicly traded company must release a financial report (also known as the 10Q form) every three months, filed with the U.S. Securities and Exchange Commission (SEC). The report must include revenue, profits, expenses, and other financial details for the preceding three months, providing shareholders insight into the company's performance.
How to Understand U.S. Stock Financial Reports:
Revenue, Sales, or Top Line: The total income for a company in each quarter is a crucial metric. When assessing the financial health of a company, revenue is often considered a more critical indicator than profits, especially for early-stage or non-profitable companies.
Earning, Profits, or Bottom Line: This data, indicating the amount a company earned in the last quarter, is of primary concern to most shareholders and potential investors.
EPS (Earnings Per Share): EPS is often considered a reflection of a company's operational results. Investors use this data to gauge the profitability of common stock, assess investment risk, evaluate a company's earning capacity, and predict growth potential, thereby making relevant economic decisions. Financial media typically reports EPS data.
Estimates, Beat and Miss: Analysts hired by Wall Street firms establish market expectations based on a company's revenue and EPS data to determine stock pricing. Beating market expectations usually results in a stock price increase, while falling short leads to a decrease in value.
Guidance: Most companies release performance estimates for the next quarter or even the next year in their quarterly reports, known as guidance. This information, not required by financial reports, often has a greater impact on stocks than actual financial performance.
Whisper Number: Traders make their profit predictions for a company's performance in a specific quarter, often deviating from consensus estimates. Divergence from consensus estimates (whisper numbers) can cause unusual stock reactions to financial reports.
Before releasing financial reports, companies publicly or privately disclose "earnings expectations" to analysts. However, to present even mediocre quarterly performance as "exceeding expectations," these expectations are often set at low levels. Investors understand this, considering whisper numbers as the true expected data, explaining why stock prices may decline even when a company's performance clearly "exceeds expectations."
veryGood! (97471)
Related
- Congress heard more testimony about UFOs: Here are the biggest revelations
- Online abuse of politically active Afghan women tripled after Taliban takeover, rights group reports
- TikTokers swear the bird test can reveal if a relationship will last. Psychologists agree.
- Aaron Nola returns to Phillies on 7-year deal, AP source says
- Bull doge! Dogecoin soars as Trump announces a government efficiency group nicknamed DOGE
- These Ninja Black Friday Deals Are Too Good To Miss With $49 Blenders, $69 Air Fryers, and More
- James scores season-high 37, hits go-ahead free throw as Lakers hold off Rockets 105-104
- Barefoot Dreams Flash Deal: Get a $160 CozyChic Cardigan for Just $90
- Noem’s Cabinet appointment will make a plain-spoken rancher South Dakota’s new governor
- More than 400,000 Afghans have returned home from Pakistan following crackdown on migrants
Ranking
- Steelers shoot for the moon ball, but will offense hold up or wilt in brutal final stretch?
- Want to save money for Thanksgiving? Here are some ideas for a cheaper holiday dinner
- Trump receives endorsement from Texas Gov. Greg Abbott at border as both Republicans outline hardline immigration agenda
- Ohio State moves up to No. 2 ahead of Michigan in the latest US LBM Coaches Poll
- LSU student arrested over threats to governor who wanted a tiger at college football games
- Chargers coach Brandon Staley gets heated in postgame exchange after loss to Packers
- College football Week 12 winners and losers: Georgia dominates, USC ends with flop
- Canned seafood moves beyond tuna sandwiches in a pandemic trend that stuck
Recommendation
-
Mississippi governor intent on income tax cut even if states receive less federal money
-
A hat worn by Napoleon fetches $1.6 million at an auction of the French emperor’s belongings
-
Right-wing populist Milei set to take Argentina down uncharted path: ‘No room for lukewarm measures’
-
LGBTQ+ advocates say work remains as Colorado Springs marks anniversary of nightclub attack
-
LSU student arrested over threats to governor who wanted a tiger at college football games
-
Jared Leto Responds to Suggestion He Looks Like Scott Disick
-
Jason Momoa makes waves as 'SNL' host, tells Dasani to 'suck it' during opening monologue
-
'Stamped From the Beginning' is a sharp look at the history of anti-Black racism