request: how does a company’s stock rise/fall so quickly immediately after earnings?
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Stock prices incorporate investors’ expectations of a company’s future value.
What causes stock prices to move on earnings release is that those expectations change due to new and current information.
Earnings per share (EPS) is one metric that analysts may try to forecast, and if actual EPS is lower or higher than the concensus EPS forecast the stock price will move. EPS isn’t the only information that comes out during earnings release though, and any unexpected information can also move the stock price.
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