Forward Guidance
Management's public forecast for future revenue, earnings, or margins. Often moves the stock more than the reported quarter itself.
Forward guidance is the outlook a company's management team provides during earnings calls or investor days — projected revenue ranges, margin targets, EPS forecasts, or qualitative commentary on business trends for the next quarter or fiscal year.
Guidance is often the single most important thing on an earnings call. A company can beat Q1 EPS by 10% and still fall 15% if it guides Q2 earnings below the consensus. The market is always pricing the future, not the past.
Companies that chronically under-promise and over-deliver trade at premium multiples because their guidance is trusted. Those with a history of guiding down are penalized with skepticism.
Related Terms
Earnings Beat
When a company reports EPS or revenue above the analyst consensus estimate. Often triggers a stock price increase.
BeginnerEarnings Miss
When a company reports EPS or revenue below the analyst consensus estimate. Typically triggers a sharp stock decline.
BeginnerEarnings Report
A company's official quarterly disclosure of revenue, earnings, margins, and guidance. The biggest recurring event in single-stock trading.
BeginnerEarnings Season
The 4–6 week window each quarter when most public companies report results. Runs approximately January, April, July, and October.
BeginnerEPS (Earnings Per Share)
Net income divided by shares outstanding. EPS is the single most-watched earnings metric for valuing a stock.
BeginnerP/E Ratio
Share price divided by earnings per share. The P/E tells you how many dollars investors pay for each dollar of earnings.
BeginnerPEG Ratio
P/E ratio divided by the expected annual EPS growth rate. Adjusts valuation for growth — a PEG near 1.0 is often seen as fair value.
Intermediate