2 ways to look at earnings estimates ✌️

One can be more helpful than the other ☝️

An AI-generated image of earnings.

Earnings drive stock prices.

That’s TKer Stock Market Truth No. 5. Here’s some more color:

Any long term move in a stock can ultimately be explained by the underlying company’s earnings, expectations for earnings, and uncertainty about those expectations for earnings.

News about the economy or policy moves markets to the degree they are expected to impact earnings. Earnings (a.k.a. profits) are why you invest in companies.

A regression analysis we highlighted last year found that over time, stock prices and earnings have an extremely tight relationship.

For more, read: Earnings are the most important driver of stock prices💰

With earnings season underway, investors and analysts will be listening carefully for anything that may help inform what to expect for earnings in the quarters and years to come.

Calendar year vs. NTM earnings estimates 📊