Historical Earnings Moves Cheat Sheet for this Week
Oct 26, 2023
From the example shown above, Snap Inc. (SNAP) has experienced six consecutive quarters of decline in earnings. The biggest price fluctuations during earnings within the past five years have been an increase of 44% and a decrease of 35%.
In addition to SNAP, there are several other popular stocks that are scheduled to report their earnings today after the market closes. These stocks, along with their five-year standard deviation of returns, are as follows:
These standard deviations represent overnight price movements, indicating that the stock prices have typically stayed within one standard deviation (around 68% likelihood) above or below the given numbers. By doubling these figures, we can estimate that the prices will stay within two standard deviations or approximately 95% of the time.
It is important to note that investors and analysts closely monitor these standard deviations as they offer valuable information about the potential risks and volatility associated with these stocks. Higher standard deviations indicate greater price fluctuations, which may be desirable for short-term traders seeking more significant opportunities but could also pose higher risks.
Interestingly, when looking at the data, we can identify the biggest price movers around earnings. Based on their standard deviation of price moves, top performers in terms of price volatility have been Enphase Energy (ENPH), Arista Networks (ANET), and Western Digital (WDC).
In contrast, some stocks show very little excitement around their earnings reports. For example, McDonald's (MCD) has a relatively low standard deviation of returns, hovering around 1.9%. Similarly, Exxon (XOM) has a one-standard deviation for past earnings, comprising approximately 68% of overnight price changes, with a minimal fluctuation of 1.6%.
For further information on these stocks and more, you can download the entire cheat sheet here.
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Michael Rechenthin, Ph.D., (aka “Dr. Data”), managing director of research and development, has 25 years of trading and markets experience. He is best known for his weekly Cherry Picks newsletter. On Thursdays, he appears on Trades from the Research Team LIVE.
Nick Battista, tastylive director of market intelligence, has a decade of trading experience. He appears Monday-Friday on Options Trading Concepts Live. On Wednesdays, he co-hosts Johnny Trades. @tradernickybat
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