Another great article. I only understood this market (in)logic late in the day and read it in a proposed article just a few days ago.
The trick here is certainly to recognize whether the priced-in earnings figures can change the trend or are confirmed by it.
I hope I have described what I mean clearly. 🙈
The trick here is certainly to recognize whether the priced-in earnings figures can change the trend or are confirmed by it.
I hope I have described what I mean clearly. 🙈
•
11
•
@TradingHase sums it up very well 👍
For me, this is precisely the crux of the matter: figures are rarely the impetus, but rather the comparison with the scenario that has already been priced in. The real art lies in recognizing whether a quarter changes the expected path - or merely confirms it.
If it is only a confirmation, this is often no longer enough for prices to rise when valuations are high. And if expectations are extremely low, even weak figures can have a relieving effect. In this respect, the description is absolutely understandable - and in my view exactly the right direction of thought.
For me, this is precisely the crux of the matter: figures are rarely the impetus, but rather the comparison with the scenario that has already been priced in. The real art lies in recognizing whether a quarter changes the expected path - or merely confirms it.
If it is only a confirmation, this is often no longer enough for prices to rise when valuations are high. And if expectations are extremely low, even weak figures can have a relieving effect. In this respect, the description is absolutely understandable - and in my view exactly the right direction of thought.
•
11
•Very good article. Thank you.
SAP immediately springs to mind as an example.
The quarterly figures for 2025 were actually good and profits increased. At least that's how I perceived it. However, the share value has fallen.
SAP immediately springs to mind as an example.
The quarterly figures for 2025 were actually good and profits increased. At least that's how I perceived it. However, the share value has fallen.
•
11
•@undraiser_2499 Good example 👍
My impression of SAP was similar: the figures themselves were solid, in some cases even better than expected. In my view, the fall in the share price came less from the actual data than from the comparison with the expected path.
The market had already priced in a lot of cloud growth, margin improvement and the AI story. The decisive factor was not that profits rose, but how quickly the mix shifted towards the cloud and how strongly margins really scaled. As soon as doubts arise here or the outlook is confirmed rather than exceeded, "good" is no longer enough - especially with an ambitious valuation.
For me, this is a classic case of: operationally okay, expectations very high, little additional room for surprise → share price reaction downwards despite good figures.
My impression of SAP was similar: the figures themselves were solid, in some cases even better than expected. In my view, the fall in the share price came less from the actual data than from the comparison with the expected path.
The market had already priced in a lot of cloud growth, margin improvement and the AI story. The decisive factor was not that profits rose, but how quickly the mix shifted towards the cloud and how strongly margins really scaled. As soon as doubts arise here or the outlook is confirmed rather than exceeded, "good" is no longer enough - especially with an ambitious valuation.
For me, this is a classic case of: operationally okay, expectations very high, little additional room for surprise → share price reaction downwards despite good figures.
••