• public companies provide guidance as part of their quarterly reports and/or earnings releases
  • guidance helps analysts build their own predictive operational and price models
  • changes in guidance (from quarter to quarter) may be even more helpful than the guidance numbers themselves
    • can tell you if a company is moving in the right direction or not
  • guidance can significantly impact stock prices
    • even if a company's quarterly results are good, lowering guidance can cause a stock price to fall