- It can be difficult to gather reliable earnings information from several different sources
- InvestingPro's "earnings" tab solves this, as it is a one-stop-shop for everything you need before an earnings report
- Through this article, we will learn how to get the best out of this tool for optimal investment decisions
- Secure your Black Friday gains with InvestingPro's up to 55% discount!
Earnings season holds paramount significance for stock market investors. The information unveiled in reports issued by publicly traded companies not only triggers updated analyst forecasts and revisions in financial models but frequently establishes the trajectory of wider stock market trends.
Yet, navigating earnings season can be a challenge, particularly for novice investors. They may wonder how to best approach this period and effectively anticipate and analyze a company's earnings, whether they're already invested or contemplating new investments.
For these investors, it's not just about knowing consensus forecasts; they need insights into a company's historical earnings patterns and its typical reactions to both positive and negative surprises - valuable information that can be challenging to access, if not behind paywalls on the internet.
InvestingPro simplifies this process, offering a wealth of crucial information for smart investment decisions. It provides comprehensive data on consensus forecasts, historical earnings trends, and how companies tend to respond to earnings surprises, all at your fingertips. So, whether you're a seasoned pro or just starting, InvestingPro is your strategic companion during earnings season.
For each stock on the market, InvestingPro offers an "earnings" tab that brings together all the information you need to understand what quarterly earnings releases mean and their implications.
Source: InvestingPro
In this article, we'll review the various elements of InvestingPro's "earnings" tab to help investors make the most of them. We'll take the example of Microsoft (NASDAQ:MSFT), one of the world's largest publicly traded companies.
How to Use InvestingPro's Earnings Tab
Naturally, investigPro's "earnings" tab first displays a summary of the previous publication, indicating whether it was a good or bad surprise, in terms of both sales and earnings per share.
Source: InvestingPro
Under this first widget, InvestingPro users are provided with a historical review of the stock's reactions the day after earnings releases, giving an indication of the extent to which the stock reacts to good and bad surprises in quarterly earnings.
Source: InvestingPro
This is followed by another widget featuring a chart comparing expected EPS with actual EPS for each of the last 8 quarters, as well as detailed information on whether analysts have exceeded or missed targets for both revenue and EPS.
Source: InvestingPro
This shows whether a stock has a habit of delivering pleasant surprises by exceeding expectations, or whether, on the contrary, it regularly misses analysts' forecasts.
The following widget, at the top of the right-hand column of InvestingPro's "earnings" tab, announces consensus forecasts for upcoming earnings, sales, and earnings per share.
Source: InvestingPro
This widget also provides key information on the evolution of analysts' EPS forecasts over the past 90 days, giving an indication of whether the publication is being approached with pessimism or optimism.
Below, InvestingPro then provides a table detailing annual EPS and revenue projections over 10 years.
Source : InvestingPro
This provides investors with invaluable details for assessing a stock's long-term potential.
Conclusion
InvestingPro's "earnings" tab, which is one of the many tools offered by the platform, provides a single-page summary of all the information you need to make the most of the earnings season, and enables you to react quickly to maximize your chances of choosing the right stocks, and avoiding (or getting rid of) stocks that are likely to weigh down your portfolio.
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Disclaimer: The author does not own any of these shares. This content, which is prepared for purely educational purposes, cannot be considered as investment advice.