Using earnings | Robinhood

Using earnings

Earnings are like quarterly report cards for companies. During earnings, companies make a public announcement about their profits or losses, and give guidance on what to expect in the future.

Companies typically make earnings announcements in a press release, in a conference call (that you can listen to on Robinhood), or in an official filing with the SEC (10-Q).

It’s a good idea to pay attention to earnings calls because they’re one of the few times you can hear a company’s CEO share how their company is performing.

What’s the strategy?

If the earnings call gives people confidence in a company, stock prices often go up. If people lose confidence in a company’s performance, stock prices typically go down.

Checking if a company’s stock price goes up or down after earnings is a great gut check to see how well the market believes a company is doing.

Where to find earnings

You can find a company’s most recent earnings in the Earnings section of its stock detail page. The detail page also shows the amount of profit a company made in the most recent quarters in terms of earnings per share (EPS) along with their next earnings announcement date.

What’s EPS?

EPS, or earnings per share, is a dollar amount that represents the company’s overall quarterly profits divided by the number of shares in the market. This shows you the amount of profit the company made for each share of stock it has in the market.

Example

Let’s say MEOW has 1 million shares in the market and just announced $10 million in revenue, their EPS would be $10.

How to use EPS

Many investors use EPS to better understand a company’s profitability and ability to meet profit goals. When profits are higher, it may indicate that the value of the company’s shares will increase. The opposite is true for when a company’s profits are down.

Expected and actual EPS

You can find them in the Earnings section of the stock’s detail page:

  • Actual EPS is what a company reports with their earnings announcement
  • Expected EPS is what analysts predict a company’s earnings will be in the future
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Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). Review a list of RHC licenses for more information.The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Review a list of our licenses for more information. Credit card products are offered by Robinhood Credit, Inc. ("RCT") (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.

RHF, RHY, RHC, RCT, and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC, RCT, and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC isn’t a member of FINRA and accounts are not FDIC insured or protected by SIPC.

RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

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