The markets reward predictable businesses and guidance often matters more than the current quarter, assuming management has any credibility. Whether that predi

The markets reward predictable businesses and guidance often matters more than the current quarter, assuming management has any credibility. Whether that predictability is from the companies own guidance or analyst estimates[1] is fine. If quarter after quarter and year after year a company can't meet or beat (or switches from consistently beating to only consistently meeting), then the stock is often punished. If it misses the current quarter and guides down, the markets typically re-calibrates valuations downward which is what appears to be going on here. [1] For example, Apple used to play a sandbagging game with their guidance. After a few years most analysts caught on and if Apple didn't beat their numbers by a consistent amount, the stock would get hammered on earnings despite the fact that they beat guidance. When a company consistently sandbags (i.e. basically gives themselves an easy target to hit for the coming quarters/year), analyst estimates tend to matter more.