So how does a company report earnings exceed expectation and still drop after reporting? What's going on team at turkey attack with solutions here with a stock market, update friendly reminder if you're new to the channel - and you are just getting started, learning more about the stock market? I upload new videos every single day so make sure that you don't miss out on any of the updates, make sure you subscribe to the channel and, of course, consider dropping a thumbs up so lyft. I want to use as an example. Today it reported earnings and it dropped 25 percent after market hours. You might think something to lose a quarter of its value.

It must have completely missed its earnings. No that's, definitely not. The case. Lyft today announced their q1 2022 earnings and their reported revenue was 875 million.

I will actually link this down below, because i want you guys to do your own due diligence. It's so much information, and just they just continue to relay and compare from year over year, q1 to q1 uh from 2021 to 2022. And yes, it is a 44 increase and then they compare their q4 of 2021 to their q1 right of 2022 and that that is a 10 decrease in overall revenue um. One of the biggest reasons that they dropped is because, if you look at their expectation, this is the market's expectation of what's factored in right before they report earnings.

Their expectation was supposedly 845 million. But again, if we go back to what they reported - and this happens very often, the revenue that they actually made in 2022 for q1 exceeds what the expectation was. So how is something that's factored in if it's better than what's factored in? How does it not shoot up? How does it not skyrocket yet alone? How does it crash and it's about guidance? This is something that one of the main reasons this is just my opinion, but it's one of the main reasons that i refuse to trade earnings. It's just not my thing: it's true risk.

It's a coin flip. They can report amazing earnings, but if their guidance is off, meaning that what they see in the up-and-coming future, if their guidance is off in any way and the market just doesn't like it, it can still crash 25 of its value gone. Just imagine if you're fully invested in lift and then you begin to see it increase in value up to 33 and then it's like site and then drops well again, it's overall guidance. One of the questions that analysts continued and continue to ask is how is and how much is lyft spending to incentivize their drivers.

One of the things that you guys should have been aware of, especially after the pandemic hit, their demand fell right and then they lost drivers. So then they had to create incentives to bring drivers back and quarter over quarter. There i mean from q1 to uh q1 of 2021 and 2022, if i'm not mistaken, they're actually down by, i think it's 100 000 uh drivers. It was about like 17 uh.

Let me see if i can actually pull it up. It was like 17.9 million drivers. Is what they had and they have 17.8 million drivers, so their overall guidance is off because they weren't sharing or disclosing how they will continue to incentivize to bring on more drivers. But on top of that, their incentives are eating up their margin.

So for the up and coming future, if all you're doing is pouring money and you're spending so much money to incentivize these drivers to drive for you, but then you report non-profitable earnings even worse than expected. Then you can see why investors can be shaken up right, especially if that's not disclosed, because they have to be pouring money. I'm sure i'm not the only person that became aware of this, but using a lyft or an uber application has become very, very expensive lately and no it's not just gas prices have gone up but they're starting to charge more because they need to pay more to Their drivers, their drivers, want more of an incentive and yeah, rightfully so, but in direct response to that, it's eating up their margin and they're, not disclosing exactly how much it is that they're spending uh when it comes down to these driver incentives. So again, the overall guidance was slightly off and again.

This is not something that you become aware of until after they report earnings. So it's when that earnings report is released, people read it bots, take action and, depending on not only what is reported, but even shortly after what is said, based off of their guidance, can have a negative influence on the overall stock. I've even seen it happen the opposite way where they miss their earnings per share where they miss their revenue, but their guidance is looking good or looking better than expected, and this stock skyrockets. Sometimes it doesn't make sense.

One of the rules that i have is, if i'm invested in a company, i shouldn't care about its intraday performance, meaning that you know i mean i guess it's a bad example, but even amazon right amazon recently dropped 14 to 15 after market hours. It offers 50 roi right now. I view amazon to be a company that i would would be happy to invest in and even if the next earnings, maybe isn't the best right, it rises a little bit but then pulls on back. It's like i'm in it.

For the long haul right, i shouldn't care how it performs every single day it's going to have its good days, and it's gon na have its bad days this one's a little bit rough, but rightfully so i mean i feel like it shouldn't catch too many people By surprise, lyft has not been performing very well lower highs and lower lows. It's been very, very bearish right, and this is since early 2021. This is a perfect example of a company that did well during pandemic conditions and then ever since they resumed business as usual. Really began to lose its value.

I think lyft is a stock worth considering, but it's not one worth being or investing blindly into. I would really want your position size. Yes, it offers great roi potential, but it's so so bearish. That would really take your position size into consideration and or direction, and waiting for true confirmation.

I wish you guys nothing, but the best. I know that it gets really frustrating when something reports it drops and there's no explanation behind it. I hope that this video got you one step closer to your overall goal and if it did, i hope that you guys can consider dropping a thumbs up. I really do appreciate it guys time make sure you stay connected.

I upload new videos every single day so make sure that you subscribe to the channel friendly reminder. If you ever have any questions, i do have a free trading discord, chat and that's going to be the first link in the description. If you guys want to be able to watch me trade live every day, then that's going to be the second link down below and again that is exclusive to only my learn plan. Profit group.

I wish you guys nothing, but the best hope that i earned a thumbs up like always. Let's make sure that we end the year on our green note, take it easy team.