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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
A company's profits, typically reported quarterly.
Why It Matters
Earnings are the ultimate scorecard for stocks. In the long run, stock prices follow earnings growth. A company that doubles earnings will roughly double in stock price over time. Short-term, earnings surprises cause the biggest single-day moves - Netflix jumped 17% on good earnings in 2023.
Key Points
- Reported quarterly (Q1, Q2, Q3, Q4) plus annual reports
- EPS (earnings per share) is the most-watched earnings metric
- Forward P/E uses estimated future earnings to value stocks
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Common Questions
A company's profits, typically reported quarterly. Earnings are the ultimate scorecard for stocks. In the long run, stock prices follow earnings growth.
Earnings are the ultimate scorecard for stocks. In the long run, stock prices follow earnings growth. A company that doubles earnings will roughly double in stock price over time. Short-term, earnings surprises cause the biggest single-day moves - Netflix jumped 17% on good earnings in 2023.
Reported quarterly (Q1, Q2, Q3, Q4) plus annual reports
EPS (earnings per share) is the most-watched earnings metric
Forward P/E uses estimated future earnings to value stocks