{"id":967241,"date":"2024-12-09T13:07:14","date_gmt":"2024-12-09T11:07:14","guid":{"rendered":"https:\/\/www.etoro.com\/?page_id=967241"},"modified":"2024-12-09T13:07:16","modified_gmt":"2024-12-09T11:07:16","slug":"earnings-made-simple","status":"publish","type":"page","link":"https:\/\/www.etoro.com\/en-us\/academy\/videos\/earnings-made-simple\/","title":{"rendered":"Earnings Made Simple"},"content":{"rendered":"\n

Description<\/h2>
Earnings season is when expectation meets reality. Like many aspects of investing, understanding market psychology can be helpful during earnings season.<\/div><\/div>

Transcript<\/h2>
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Every quarter public companies release their earnings reports.<\/p>\n\n\n\n

These earnings reports cover the basics of a company’s financial health: things like revenue, profit, and costs.<\/p>\n\n\n\n

The raw numbers are important, especially if you want to really understand the business, but, like many aspects of investing, market psychology plays a huge role during earnings season.<\/p>\n\n\n\n

Investment analysts look at companies and forecast how they will perform in the future.<\/p>\n\n\n\n

Now, they do this throughout the year but earning season is when they find out if reality meets expectation.<\/p>\n\n\n\n

If analysts have high expectations for a company and the company’s earnings report meets that expectation, this could be a recipe for success.<\/p>\n\n\n\n

On the other hand, high expectations can lead to disappointment and even a small miss of a rosy forecast can play out poorly for a company’s stock price.<\/p>\n\n\n\n

For those interested in upcoming earnings reports, check out eToro’s earnings report calendar.<\/p>\n\n\n\n

For long-term investors, you should be aware that earnings reports are quarterly and big companies tend to move slowly, so if you’re looking too closely at these numbers you might miss the forest for the trees.<\/p>\n\n\n\n

Sometimes the next big product or disruptive technology can have an outsized impact on a company, and that’s not something you’ll find on an income statement.<\/p>\n<\/div>