Remember: stock prices are based on supply and demand, and change based on investors’ perceptions of a company.

Because earnings reports contain a lot of information on companies’ performance, stock prices can change a lot after they come out as investors scramble to buy or sell.

In general, investors will scrutinize 2 things: the company’s actual financial numbers, and their future outlook.

Professional analysts set "expectations" ahead of earnings reports: they try to guess how the company performed, most commonly in terms of revenue and EPS (earnings per share) 💰

When a company's EPS and revenue exceeds analyst expectations, its stock price may often rise alongside investor optimism. 📈

Conversely, if EPS and revenue fall short of expectations, the stock price can often decline, as investor confidence wavers. 📉

Another important piece of information analysts look at is forecasts.

This is companies' predictions and plans for the future 🔭

When companies project high growth, or high profits in the near future, investors may get excited and buy the stock, which can drive the stock price up, and vice versa.

For example, Nvidia stock rose a record 24% after their May 2023 earnings, because they drastically exceeded forecasted EPS & revenue, and also set extremely optimistic forecasts for the future.

As an investor, it's useful to monitor earnings results & analyst forecasts for stocks you own or watch.

You can find this data for any company right on Bloom’s stock page – check it out for Nvidia!