Glossary·Written by a CPA
Guidance
Also called: Outlook
A company's own forecast for its upcoming revenue, earnings or other results, usually given with quarterly earnings.
Guidance is the company telling you what it expects for the next quarter or the full year, which basically just means management's own forecast. It's usually a range for things like revenue, earnings per share or margins.
The market often cares more about guidance than about the quarter that just ended, because stock prices are mostly about the future. So a company can report a great quarter and still see the stock fall if it guides below what analysts were expecting.
For you, it's worth noticing how a company's guidance has played out over time. Some management teams set targets they can reliably beat, and others have a habit of overpromising.
The catch. Guidance isn't required and isn't audited, and a company that suddenly stops giving it is often signaling less confidence in what's ahead.
Where I talk about it
- Aurora Stock (AUR): What Has to Go Right for $11.55? at 0:25
- Intel Stock Fell 20% After Earnings Despite 78% AI Growth (INTC) at 2:10
- AMD Stock at $520? The $17 Billion Guide Explained at 0:28
- 5 Dividend Stocks to Buy and Hold Forever at 1:34
- Ryan Cohen's GameStop Bet Is Bigger Than Video Games at 2:31
- Fortinet Stock Crashed After Beating Earnings. Overreaction? (FTNT) at 0:00
- ServiceNow Stock Fell 15% After Beating Earnings. Here's Why (NOW) at 0:00
Cheat sheet
Free to save and share. Tap the image to open it full size.
Related terms
This is education, not tax or investment advice. I'm a CPA, but I'm not your CPA. Full disclaimer.