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

Because shareholders expect a certain level of profits to justify paying for the current price for the stock.