Reliability of earnings results as macroeconomic indicators
I was just reading someone interpreting Bill.com's low next quarter growth guidance and interpreting that as weakness in SMB spend. It makes sense as a bellweather but at what point can you trust a specific company's results as a macroeconomic indicator vs. concern about statistical significance of noise (e.g., actually it's a shit management team / company so we can't rely on their earnings results / guidance to be indicative directionally of macro trends)?
Look into the guidance of peer companies and see if they mention similar macro factors affecting their EPS. Regardless of using the quarterly guidance as an indicator for macro, it’s much easier to understand the macro drivers first and then use quarterly guidance to reaffirm your thesis.
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