What moves the price of a stock?
Stock prices fluctuate based on several factors. A share can have a different value minute by minute as traders attempt to find the fair value of a stock. One theory is that the price of a stock is equal to the future discounted cash flows that a company produces. Each company reports its earnings and revenues as well as future guidance on a regular schedule. Most public companies report financial results quarterly. The value of a stock is a multiple of the earnings it produces per share. When a company reports its earnings, it reports the total profits as well as its profits per share. Analysts will then attempt to determine the growth in those earnings moving forward to determine the multiple that a company should receive.
Ahead of each earnings release, analysts forecast what a company is likely to report. If the earnings, revenues, and guidance are better than expected, a stock price will likely rise. If financial results are worse than expected, a stock price is likely to fall.
Stock prices are also driven by technical analysis (the study of past price action) which includes trend trading, momentum, and reversion to the mean. Many traders use the combination of technical analysis and fundamental analysis to determine if they will buy or sell a stock.