Will Rite Aid Top The Whisper Number This Quarter?

Rite Aid (RAD) is expected to report earnings Thursday before market open. The whisper number is -$0.01, one cent ahead of the analysts' estimates and showing some confidence from the WhisperNumber community. 

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A year ago the company reported earnings of $0.00, in-line with the whisper number. Rite Aid has a 47% positive surprise history (having topped the whisper in 28 of the 60 earnings reports for which we have data).

Earnings history:

  •  Beat whisper: 28 qtrs
  •  Met whisper: 1 qtrs
  •  Missed whisper: 31 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:

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The strongest price movement of +6.0% comes within thirty trading days when the company reports earnings that beat the whisper number, and -2.2% within one trading day when the company reports earnings that miss the whisper number. The overall average post earnings price move is 'as expected' (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.

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

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The company has reported earnings ahead of the whisper number in one of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings in-line with the whisper number. Following that report the stock realized a 9.3% gain in five trading days. Last quarter the company reported earnings in-line with the whisper number. Following that report the stock realized an 8.1% gain in five trading days. Overall historical data indicates the company to be (on average within thirty trading days) an 'as expected' price reactor when the company reports earnings.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not ...

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