12 pictures easy to read and understand results
Is financial reporting advantageous or empty? Focus on these 4 points!
The company issued a report, how to determine the good and bad of it? There are a lot of places to see, but we can simplify it by focusing on the following 4 key points.
1. Revenue growth
Mainly look at the absolute value of the growth rate to see if the company accelerates growth. At the same time, look at the growth of the industry at the same time, and it is better to accelerate faster than competitors in the same industry.
2. Increase in net profit
The same applies to the absolute value of the growth rate and to observe whether company growth is accelerating or slowing down. AT THE SAME TIME, LOOK AT THE CONTRAST BETWEEN NET PROFIT GROWTH AND REVENUE GROWTH. IF IT IS HIGHER THAN REVENUE GROWTH, INDICATING THAT PROFITABILITY IS IMPROVING, IS A GOOD SIGNAL, AND VICE VERSA.
3. Actual results VS analyst expectations
For some larger companies, analysts predict the company's revenue, net profit, or EPS for the current quarter and future fiscal quarters and form consistent expectations (the average of the forecast number). If the results of the financial statement are higher than analysts expect, the formation of a larger profit may stimulate the short-line movement of the stock price. On the contrary, it puts pressure on short-term movements in stock prices.
4. Performance Guidance VS Analyst Expectations
Some companies publish performance guidance for the next fiscal quarter after the release of the current financial statements. If the performance guidance is higher than analysts expect, it will be a benefit to the share price and vice versa.
So, what factors have the biggest impact on short-term stock prices? In the stock market, the future may be more important than now, and expectations are more important than actually.
Of the above 4 factors, performance guidance is a guide to future expectations and is therefore the most important; analysts' comparison of the forecast and actual performance of the current quarter is the verification of expectations, which is second in importance; while revenue growth and net profit growth are both actual performance data that may have been expected by the market and Stock prices have reacted in the past, so the importance is at the end.
