Know the Fundamentals of Earnings Momentum

Sabrinaleesab02 Mar, 2022Finance

Since elementary school, we have already heard of the term momentum. In physics, it refers to something that a moving object has because of its mass and motion. Did you know that we can also encounter it in terms of investments? We have earnings momentum, and it is very similar to what we mentioned earlier. It refers to corporate earnings per share growth that accelerates or decelerates from the previous fiscal year or quarter. Most of the time, this happens hand in hand with accelerating revenues and expanding margins because of improved sales and costs or overall market expansion. Other people also consider earnings momentum as an investment strategy that aims to take advantage of companies with increasing share prices because of positive earnings momentum or EPS growth.