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

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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

17 Answers

Anonymous 0 Comments

If a company doesn’t meet “targets”, it doesn’t mean that it “fails” in the sense of going out of business. However, it might mean the company is “overhyped” since people thought it would perform “really good” and it just did “regular good”. So people might feel less positive about the company.

This can be especially concerning if the “targets” were based on the company’s own predictions, since it could mean that they don’t understand their own business as well as they think they do. Again, not a fatal problem but it can make people worried. 

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