Another Negative Reaction To Yahoo! Earnings?

Yahoo! (YHOO) is expected to report earnings on Monday, January 23rd, after market close. The whisper number is $0.21, in-line with the analysts' estimate and showing neutral confidence from the WhisperNumber community. Whispers range from a low of $0.19 to a high of $0.23. A year ago Yahoo! reported earnings of $0.13. Yahoo! has a 60% positive surprise history (having topped the whisper in 44 of the 73 earnings reports for which we have data).

Earnings history:

  •  Beat whisper: 44 qtrs
  •  Met whisper: 3 qtrs
  •  Missed whisper: 26 qtrs

Our primary focus is on post earnings price movement. Knowing how likely a stock's price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:

The strongest price movement of -3.2% comes within twenty trading days when the company reports earnings that beat the whisper number, and -5.9% within thirty trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move is 'negative' (beat the whisper number and see weakness, miss and see weakness) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

The company has reported earnings ahead of the whisper number in three of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings two cents ahead of the whisper number. Following that report the stock realized a 4.7% loss in five trading days. Last quarter the company reported earnings eight cents ahead of the whisper number. Following that report the stock realized a 1% loss in ten trading days before turning and seeing a 5.3% loss in thirty trading days. Overall historical data indicates the company to be (on average within thirty trading days) a 'negative' price reactor when the company reports earnings.

Enter your expectation and view more earnings information here, or let us know your expectation in the comments section below. 

more

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.