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Original, source-based guides to earnings and consensus estimates for investors.
20 articles · Original research guides with primary sources and worked examples
Consensus combines analyst estimates on a comparable basis. Learn to check the mean or median, collection date, accounting basis, and contributors before comparing earnings.
Read article →Learn the basic earnings surprise formula and its pitfalls when losses turn into profits. Fix pre-release estimates and compare revenue, operating profit, and EPS on matching bases.
Read article →Year-over-year profit growth can coincide with a consensus miss. Separate a low comparison base from market expectations to assess the causes and persistence of disappointing earnings.
Read article →Understand the period, metrics, and endpoints in company guidance. Check currency, tax, and adjusted-earnings assumptions, then subtract results already achieved to calculate what remains.
Read article →YoY compares revenue with the same period last year; QoQ compares it with the previous quarter. Learn the calculations, year-to-date conversions, and effects of seasonality and fiscal periods.
Read article →Separate revenue added through acquisitions from growth in existing operations. Check the comparison scope, consolidation dates, currency, and disposals to assess how sustainable growth is.
Read article →Constant-currency growth removes changes in translation exchange rates. Understand its calculation, its difference from reported growth, and the currency effects that remain in cash flow.
Read article →Higher EPS estimates can reflect net income growth, fewer shares, or tax changes. Align the fiscal year and dilution basis to identify the source of earnings forecast revisions.
Read article →An earnings beat does not guarantee a stock-price rise. Assess pre-release expectations, forward guidance, concurrent market moves, and trading times to explore possible explanations.
Read article →Contributor counts show the breadth of forecasts but do not guarantee accuracy. Check metric-specific sample sizes, revision dates, changes in contributors, and shared assumptions.
Read article →Look beyond the consensus average with highs, lows, and standard deviation. Identify bullish and bearish assumptions without mistaking analyst disagreement for a probability range.
Read article →Orders and accounting revenue are recorded at different times. Check delivery, acceptance, performance terms, cancellations, and backlog movements to link revenue conversion with cash collection.
Read article →Separate operating profit growth into revenue scale and margin changes. Link the results to product mix, costs, spending timing, and one-off items to assess whether higher margins can last.
Read article →Calculate how fixed costs amplify revenue changes in operating profit. Learn the role of contribution margin, break-even revenue, and step increases in costs as capacity expands.
Read article →Price multiplied by volume produces revenue. Separate volume losses, product mix, and discounts, then use a hypothetical example to calculate what sustains revenue and improves profit.
Read article →Segment growth rates differ from contributions to total results. Use revenue weights, profit increases, intersegment eliminations, and corporate costs to identify what drives consolidated performance.
Read article →Preliminary earnings and subsequent financial reports can differ in status and scope. Check audit or review status, consolidation scope, and correction explanations to assess the investment impact.
Read article →Simple annualization can overstate or understate results for seasonal businesses. Compare matching quarters, trailing four-quarter totals, and seasonal weights while checking structural changes.
Read article →Higher annual guidance does not always mean stronger future demand. Separate results already achieved, currency, tax, and buyback effects to assess whether the remaining outlook improved.
Read article →Ask about specific changes in demand, pricing, margins, and cash conversion rather than vague outlooks. Build questions from earnings gaps and link the answers to subsequent disclosures.
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