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Guidance

Management's forecast for future revenue, earnings, or other metrics, usually for the next quarter and full year.

Guidance is the forward-looking part of an earnings-report, and markets are forward-looking. A raise, a cut, or a withdrawal of guidance is frequently the main driver of the post-earnings move.

Companies manage guidance conservatively so they can beat it, which is why beat rates are high and why a small miss is punished.

Example: a company reports a record quarter but cuts full-year revenue guidance from $4.2 billion to $4.0 billion. The 5% cut produces a 15% drop in the stock.

Related: earnings-report, earnings-call, eps

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