eli5: Why is it not good enough for a company to turn a profit, why do they have to hit “expectations”

Question

Headline after headline say that companies “failed” and/or didn’t hit “targets”, but when you look at the numbers, the company made profits, sometimes in the millions to billions, it just wasn’t “enough”.

Is this greed? Why is it not good enough to make a profit?

In: Economics

Answer 1

1. A steady profit doesn’t increase stock value
2. The owners of most businesses are shareholders who bought stock (ownership) to sell it later at a higher price
3. Business decisions prioritize increasing stock value through expanding the business