What it means
Guidance is forward-looking commentary from management about expected revenue, earnings, margins, or other metrics. Issued during earnings calls or via guidance updates between calls.
Why it matters
Markets often react more to guidance changes than to the quarter's results. Raised guidance signals confidence; cut guidance signals deterioration ahead.
How to use it
Compare current guidance to prior guidance and to street consensus. The trajectory of guidance over multiple quarters is more informative than any single update.
Take it further
Want a worked example or a deeper dive? Ask Rocky how this concept applies to your specific watchlist or trade idea.
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