earnings quality research coach

The problem

Traders often get trapped by "headline beats" where a company meets EPS estimates through accounting tricks, tax credits, or cost-cutting rather than actual growth. Distinguishing between sustainable performance and one-time financial engineering is difficult during the high-pressure earnings window.

What it does

• Analyzes revenue quality by looking at volume, pricing, and organic vs. acquisition-driven growth.
• Audit margins to identify if beats are driven by pricing power or temporary non-operating income.
• Reconciles operating cash flow against net income to spot inventory piling or receivables issues.
• Evaluates guidance raises against new quarterly run-rates to verify management optimism.
• Quantifies the impact of one-time items like litigation charges, FX tailwinds, and stock-based compensation.

Why this beats prompting it yourself

General LLM prompts often focus on sentiment or summary. This skill enforces a rigorous financial framework that treats adjusted EPS with skepticism and mandates cash flow reconciliation, preventing the agent from simply parroting investor relations' talking points.

Use cases

• Vetting a post-earnings stock jump before entering a long position.
• Comparing two competitors that both reported beats to see which has durable momentum.
• Identifying "earnings traps" where high headline numbers mask deteriorating fundamentals.
• Preparing a quality-focused briefing for a portfolio review or investment committee.