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S&P 500   4,298.86
DOW   33,876.78
QQQ   354.50
3 EV Stocks You Need To Have On Your Watchlist
"Unknown laser company making HUGE profit from Russia-Ukraine War" (Ad)
Will NIO Partake In China's Economic Awakening?
BJ's Restaurants' Approaching Buy Point As Earnings Surge 150%
66,000% upside on tiny biotech? (Ad)
Cactus Opens The Cash Flow Wellhead With Flexsteel Acquisition 
Tax Software Specialist Vertex In Buy Zone After Base Breakout
Trade Smarter: Discover Hidden Opportunities w/ A.I. (Ad)
How to Choose a Brokerage Account or Online Broker
Will Plug Power’s Deal With Energy Vault Move The Needle? 
S&P 500   4,298.86
DOW   33,876.78
QQQ   354.50
3 EV Stocks You Need To Have On Your Watchlist
"Unknown laser company making HUGE profit from Russia-Ukraine War" (Ad)
Will NIO Partake In China's Economic Awakening?
BJ's Restaurants' Approaching Buy Point As Earnings Surge 150%
66,000% upside on tiny biotech? (Ad)
Cactus Opens The Cash Flow Wellhead With Flexsteel Acquisition 
Tax Software Specialist Vertex In Buy Zone After Base Breakout
Trade Smarter: Discover Hidden Opportunities w/ A.I. (Ad)
How to Choose a Brokerage Account or Online Broker
Will Plug Power’s Deal With Energy Vault Move The Needle? 
S&P 500   4,298.86
DOW   33,876.78
QQQ   354.50
3 EV Stocks You Need To Have On Your Watchlist
"Unknown laser company making HUGE profit from Russia-Ukraine War" (Ad)
Will NIO Partake In China's Economic Awakening?
BJ's Restaurants' Approaching Buy Point As Earnings Surge 150%
66,000% upside on tiny biotech? (Ad)
Cactus Opens The Cash Flow Wellhead With Flexsteel Acquisition 
Tax Software Specialist Vertex In Buy Zone After Base Breakout
Trade Smarter: Discover Hidden Opportunities w/ A.I. (Ad)
How to Choose a Brokerage Account or Online Broker
Will Plug Power’s Deal With Energy Vault Move The Needle? 

Earnings Beats and Misses

Wall Street equities research analysts issue quarterly earnings per share (EPS) estimates for most publicly-traded companies. The average of their EPS estimates is often referred to as the consensus EPS estimate. When companies actual earnings vary significantly from analysts' earnings estimates, this is referred to as an earnings surprise. This report shows the companies that have beat or missed analysts' earnings expectations by the largest margin during the last 90 days. Learn more about earnings surprises.

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CompanyEarnings DateConsensus EPSActual EPSBeat/MissRevenue EstimateActual RevenueActions
MicroStrategy stock logo
5/1/2023$0.49$30.59$30.10$119.04 million$121.90 million    
NVR stock logo
4/25/2023$88.96$99.89$10.93$2.09 billion$2.13 billion  
NetEase stock logo
5/25/2023$1.12$11.62$10.50$24.81 billion$25.05 billion    
Kineta stock logo
Taiwan Semiconductor Manufacturing stock logo
Taiwan Semiconductor Manufacturing
4/20/2023$1.21$7.98$6.77$516.87 billion$508.63 billion    
Stronghold Digital Mining stock logo
Stronghold Digital Mining
3/29/2023($4.90)$1.60$6.50$21.70 million$23.41 million    
Arcturus Therapeutics stock logo
Arcturus Therapeutics
3/28/2023($1.86)$4.33$6.19$134.54 million$160.29 million
Avis Budget Group stock logo
Avis Budget Group
5/1/2023$3.34$7.72$4.38$2.54 billion$2.56 billion    
Credit Suisse Group stock logo
Credit Suisse Group
4/24/2023($0.15)$3.33$3.48N/A$19.96 billion
Albemarle stock logo
5/4/2023$6.93$10.32$3.39$2.74 billion$2.58 billion      
InterDigital stock logo
5/4/2023$0.62$4.00$3.38$97.40 million$202.37 million
AutoZone stock logo
5/23/2023$30.84$34.12$3.28$4.12 billion$4.09 billion    
Sinclair Broadcast Group stock logo
Sinclair Broadcast Group
5/3/2023($0.59)$2.64$3.23$774.56 million$773.00 million      
H World Group stock logo
H World Group
5/29/2023$0.12$3.09$2.97$650.94 million$652.00 million    
Alpha Metallurgical Resources stock logo
Alpha Metallurgical Resources
5/8/2023$14.22$17.01$2.79$858.50 million$911.24 million      
Voyager Therapeutics stock logo
Voyager Therapeutics
5/9/2023$0.15$2.94$2.79$99.33 million$150.48 million
Mawson Infrastructure Group stock logo
Mawson Infrastructure Group
Dillard's stock logo
5/11/2023$9.07$11.77$2.70$1.57 billion$1.58 billion
PENN Entertainment stock logo
PENN Entertainment
5/4/2023$0.38$3.05$2.67$1.59 billion$1.67 billion    
Galapagos stock logo
5/4/2023($1.83)$0.43$2.26$76.88 million$191.93 million  
Solid Biosciences stock logo
Solid Biosciences
Bread Financial stock logo
Bread Financial
4/27/2023$7.11$9.08$1.97$1.06 billion$1.29 billion    
Booking stock logo
5/4/2023$9.63$11.60$1.97$3.75 billion$3.78 billion      
Moderna stock logo
5/4/2023($1.77)$0.19$1.96$1.17 billion$1.86 billion    
Tonix Pharmaceuticals stock logo
Tonix Pharmaceuticals
BioNTech stock logo
5/8/2023$0.18$2.05$1.87$1.09 billion$1.28 billion    
Two Harbors Investment stock logo
Two Harbors Investment
5/1/2023($1.04)$0.80$1.84N/A$116.59 million    
argenx stock logo
5/4/2023($2.34)($0.52)$1.82$191.24 million$229.76 million
POINT Biopharma Global stock logo
POINT Biopharma Global
3/27/2023($0.26)$1.53$1.79$260.00 million$226.58 million  
Reinsurance Group of America stock logo
Reinsurance Group of America
5/5/2023$3.37$5.16$1.79$4.23 billion$4.25 billion    
PDC Energy stock logo
PDC Energy
5/3/2023$2.91$4.64$1.73$750.29 million$957.70 million  
Madison Square Garden Entertainment stock logo
Madison Square Garden Entertainment
5/18/2023($1.30)$0.42$1.72$147.10 million$201.23 million
Aprea Therapeutics stock logo
Aprea Therapeutics
Intuit stock logo
5/23/2023$7.30$8.92$1.62$6.09 billion$6.02 billion      
Chipotle Mexican Grill stock logo
Chipotle Mexican Grill
4/25/2023$8.89$10.50$1.61$2.34 billion$2.40 billion    
Coinbase Global stock logo
Coinbase Global
5/4/2023($1.44)$0.15$1.59$652.76 million$772.53 million
Cal-Maine Foods stock logo
Cal-Maine Foods
3/28/2023$5.09$6.62$1.53$898.93 million$997.49 million
Orchard Therapeutics stock logo
Orchard Therapeutics
5/15/2023($1.61)($0.12)$1.49$6.48 million$1.24 million
Teekay Tankers stock logo
Teekay Tankers
5/11/2023$3.65$5.13$1.48N/A$270.47 million
Midwest stock logo
5/15/2023($0.10)$1.36$1.46$15.70 million$38.45 million
Aptevo Therapeutics stock logo
Aptevo Therapeutics
Warrior Met Coal stock logo
Warrior Met Coal
5/3/2023$2.12$3.57$1.45$413.82 million$509.70 million    
Shift Technologies stock logo
Shift Technologies
3/28/2023($5.07)($3.65)$1.42$81.28 million$65.57 million
Pampa Energía stock logo
Pampa Energía
5/10/2023$1.15$2.56$1.41$401.41 million$431.00 million  
DouYu International stock logo
DouYu International
3/20/2023$0.01$1.42$1.41$244.49 million$243.73 million    
HCI Group stock logo
HCI Group
5/9/2023$0.09$1.50$1.41$118.27 million$129.03 million  
Ligand Pharmaceuticals stock logo
Ligand Pharmaceuticals
5/4/2023$0.89$2.28$1.39$33.55 million$43.98 million    
Builders FirstSource stock logo
Builders FirstSource
5/3/2023$1.63$2.96$1.33$3.57 billion$3.88 billion  
M/I Homes stock logo
M/I Homes
4/26/2023$2.36$3.64$1.28$787.90 million$1.00 billion      
Medifast stock logo
5/1/2023$2.40$3.67$1.27$319.50 million$349.00 million    
Group 1 Automotive stock logo
Group 1 Automotive
4/26/2023$9.70$10.93$1.23$3.92 billion$4.10 billion      
BioNTech stock logo
3/27/2023$8.04$9.26$1.22$3.87 billion$4.28 billion    
CONSOL Energy stock logo
5/2/2023$5.34$6.55$1.21$594.30 million$688.61 million
ZIM Integrated Shipping Services stock logo
ZIM Integrated Shipping Services
3/13/2023$2.26$3.44$1.18$2.06 billion$2.19 billion    
Assurant stock logo
5/2/2023$2.32$3.49$1.17$2.60 billion$2.64 billion    
THOR Industries stock logo
THOR Industries
6/6/2023$1.07$2.24$1.17$2.81 billion$2.93 billion    
Martin Marietta Materials stock logo
Martin Marietta Materials
5/4/2023$0.99$2.16$1.17$1.27 billion$1.35 billion    
Eagle Pharmaceuticals stock logo
Eagle Pharmaceuticals
3/13/2023($0.54)$0.62$1.16$58.99 million$60.70 million
JinkoSolar stock logo
4/28/2023$0.37$1.53$1.16$3.30 billion$3.40 billion
Precision Drilling stock logo
Precision Drilling
4/26/2023$2.96$4.12$1.16$386.28 million$413.13 million
Eterna Therapeutics stock logo
Eterna Therapeutics
Viasat stock logo
5/17/2023$14.41$15.56$1.15$684.47 million$666.10 million
United Microelectronics stock logo
United Microelectronics
4/26/2023$0.16$1.31$1.15$54.64 billion$54.21 billion  
Hubbell stock logo
4/25/2023$2.46$3.61$1.15$1.25 billion$1.29 billion    
Markel stock logo
4/27/2023$16.23$17.35$1.12$3.38 billion$3.64 billion    
Caterpillar stock logo
4/27/2023$3.79$4.91$1.12$15.27 billion$15.86 billion      
Acutus Medical stock logo
Acutus Medical
3/16/2023($0.70)$0.41$1.11$4.80 million$4.96 million
Arrowhead Pharmaceuticals stock logo
Arrowhead Pharmaceuticals
5/2/2023($0.65)$0.45$1.10$45.48 million$146.27 million    
Safehold stock logo
4/26/2023($0.69)$0.41$1.10$75.25 million$78.30 million    
Deere & Company stock logo
Deere & Company
5/19/2023$8.57$9.65$1.08$14.87 billion$16.08 billion    
Encore Wire stock logo
Encore Wire
4/25/2023$5.44$6.50$1.06$684.01 million$660.50 million    
Chart Industries stock logo
Chart Industries
4/28/2023$0.36$1.41$1.05$495.89 million$537.90 million    
W.W. Grainger stock logo
W.W. Grainger
4/27/2023$8.57$9.61$1.04$4.08 billion$4.09 billion    
Meritage Homes stock logo
Meritage Homes
4/26/2023$2.51$3.54$1.03$1.03 billion$1.28 billion    
Dycom Industries stock logo
Dycom Industries
5/24/2023$0.70$1.73$1.03$940.22 million$1.05 billion    
Valero Energy stock logo
Valero Energy
4/27/2023$7.24$8.27$1.03$37.88 billion$36.44 billion    
Kyndryl stock logo
5/16/2023($1.23)($0.21)$1.02$4.13 billion$4.26 billion
Westlake stock logo
5/4/2023$2.05$3.05$1.00$3.41 billion$3.36 billion      
TransDigm Group stock logo
TransDigm Group
5/9/2023$4.98$5.98$1.00$1.53 billion$1.59 billion    
Eargo stock logo
5/11/2023($1.90)($0.90)$1.00$7.60 million$11.81 million    
GeneDx stock logo
Maxeon Solar Technologies stock logo
Maxeon Solar Technologies
5/10/2023($0.51)$0.46$0.97$328.47 million$318.33 million    
CRISPR Therapeutics stock logo
CRISPR Therapeutics
5/8/2023($1.64)($0.67)$0.97$24.33 million$100.00 million  
Toll Brothers stock logo
Toll Brothers
5/24/2023$1.89$2.85$0.96$2.07 billion$2.51 billion    
Piper Sandler Companies stock logo
Piper Sandler Companies
5/2/2023$1.39$2.35$0.96$299.34 million$290.24 million    
Blue Apron stock logo
Blue Apron
3/16/2023($6.84)($5.88)$0.96$107.88 million$106.81 million
Spero Therapeutics stock logo
Spero Therapeutics
3/30/2023($0.40)$0.55$0.95$1.60 million$47.44 million
HCA Healthcare stock logo
HCA Healthcare
4/21/2023$3.99$4.93$0.94$15.26 billion$15.59 billion    
MercadoLibre stock logo
5/3/2023$3.04$3.97$0.93$2.88 billion$3.04 billion    
2seventy bio stock logo
2seventy bio
3/16/2023($1.53)($0.60)$0.93$16.72 million$56.18 million
Parker-Hannifin stock logo
5/4/2023$5.01$5.93$0.92$4.79 billion$5.06 billion      
DarioHealth stock logo
5/11/2023($0.46)$0.45$0.91$6.93 million$7.07 million  
Axsome Therapeutics stock logo
Axsome Therapeutics
5/8/2023($1.13)($0.22)$0.91$26.87 million$94.58 million
Berkshire Hathaway stock logo
Berkshire Hathaway
5/6/2023$2.79$3.69$0.90$74.47 billion$85.39 billion
AGCO stock logo
5/2/2023$2.64$3.51$0.87$3.15 billion$3.30 billion      
American Woodmark stock logo
American Woodmark
5/25/2023$1.35$2.21$0.86$478.11 million$481.10 million    
Marathon Petroleum stock logo
Marathon Petroleum
5/2/2023$5.23$6.09$0.86$35.17 billion$35.08 billion      
HSBC stock logo
5/1/2023$1.75$2.60$0.85$17.10 billion$20.17 billion    
Deckers Outdoor stock logo
Deckers Outdoor
5/25/2023$2.61$3.46$0.85$723.47 million$791.57 million      
biote stock logo
5/9/2023$0.09$0.94$0.85$43.38 million$44.84 million  

Key Points

  • An earnings surprise is defined as higher or lower revenue and/or earnings reported by a company in its earnings report.
  • Earnings surprises can come in four varieties, each with their own meaning for investors.
  • The revenue and earnings forecasts that analysts provide correlate to their overall rating for a stock.
  • Investors should look at the track record of an analyst when assigning a meaning to their revenue and earnings forecasts. 
  • 5 stocks we like better than Coca-Cola
What is an Earnings Surprise?

An earnings surprise occurs when a company posts revenue and/or earnings per share or profit that is higher (beat) or lower (miss) than what the analysts that follow the company predict. 

When the earnings beat or miss is significant, it will likely have an impact on the company’s stock price. This price movement can be temporary or it can be a continuation of a trend in place before the company reported earnings. In this article, we’ll take a closer look at earnings surprises, including some of the popular forecasting models that analysts use to estimate the value of a company. 

Overview of Earnings Surprises

Earnings season is a time when a company’s stock price can make outsized movements and an earnings report is like a report card for investors. The Securities and Exchange Commission (SEC) requires every publicly traded company to deliver an earnings report to shareholders on a regular basis, usually quarterly.

This report covers a range of issues that affect business operations. In the financial press, it boils down to the company’s revenue (the top line) and earnings per share, or profit (the bottom line).

Analysts spend extensive time researching a company and cover this type of data. They speak with management, visit facilities and pay attention to macroeconomic conditions that could affect the sector in which that company operates. From there, the analysts post expectations for the company’s revenue and earnings per share for the upcoming period. 

On many occasions, a company reports higher or lower earnings than what analysts expect. These are known as earnings surprises and they can occur on the upside (an earnings beat) or the downside (an earnings miss). 

MarketBeat offers subscribers the MarketBeat earnings screener which could also be used as an earnings surprise screener. That’s because the screener allows you to search for a company’s earnings results based on specific criteria such as whether its earnings per share (EPS) estimate came in higher or lower than the consensus estimate of analysts. 

The next section provides more details about different earnings surprises that investors can expect.  

Breaking Down Earnings Surprises

In addition to providing the raw numbers, companies use their earnings reports as a way to provide guidance about upcoming quarters or the entire year. As a free service, you can find the latest earnings reports from MarketBeat by looking under the tab called “earnings calendar.” 

Don’t forget to review the earnings transcript of the company’s conference call. What are earnings transcripts? They are audio recordings and/or written transcriptions of everything that a company says to analysts and investors after they report earnings. 

Pay close attention to what company management says to understand how it may affect your investment decisions. MarketBeat has a tool that can help you read or listen to many transcripts. MarketBeat also provides tools to help you learn more about earnings guidance data.

There are four types of earnings surprises: a double beat, a double miss, a “beat on revenue but a miss on earnings” and a “miss on revenue but a beat on earnings.” 

The Double Beat

The “double beat” is the most bullish of all outcomes. This means that for the quarter just ended, the company sold more than analysts expected. More importantly, it generated a higher profit. This could mean that its products had a higher profit margin or it could mean that the company has an efficient cost structure that allows more revenue to go to the bottom line. 

In either case, it’s considered bullish for the stock, so you can weigh this against the company’s future guidance. A company may issue a warning that while it beats on revenue and earnings in the current quarter, that trend will not likely continue. In this case, the company’s stock could drop in value. However, if that forward guidance suggests that revenue and earnings will continue to grow, the stock could move much higher.

The Double Miss

Not surprisingly, the “double miss” is the most bearish of all outcomes. This means that the company generated less revenue and profit than the analysts expected. If this is followed by negative guidance, you may want to sell your stock. On the other hand, if the miss was caused by conditions largely outside of the company’s control, you may decide to hang on to the stock, particularly if the company pays a dividend. 

For example, at the onset of the COVID-19 pandemic, many companies saw their stock prices plunge. In the initial quarters, many delivered lower revenue and earnings than forecasted. However, when companies quickly reversed, prudent investors made substantial gains.

Beat on Revenue, Miss on Earnings

A “beat on revenue, miss on earnings” is generally seen as bearish. When a company increases its sales but doesn’t generate as much profit as in prior quarters, it suggests some kind of negative pricing imbalance. In many cases, it signals that the company does not have the pricing power to pass along increasing producer costs to its customers. If the company operates in a highly cyclical sector, this may weigh on the stock for several quarters and may encourage you to sell your shares. 

Beat on Earnings, Miss on Revenue

Conversely, a “beat on earnings, miss on revenue” is seen as neutral to slightly bullish. Obviously, it’s not great for a company to sell fewer products. If the numbers beat profit expectations, it can suggest that the company has a high profit margin and that its customers will pay that premium to own the products. If investors believe that the situation will continue for several quarters, it may be time to buy shares even though the stock may go higher after earnings. 

Earnings Surprises and Analyst Estimates

Let’s take a look at what analysts typically recommend for individual stocks:

  • “Strong buy” or “buy” recommendation: This means that the analyst has made a recommendation for investors to buy a particular stock or security. You can expect a company to beat analysts’ recommendations.
  • “Strong sell” or “sell” recommendation: This means that an analyst has made a recommendation for investors to sell or liquidate their position in a particular stock or security. In this scenario, the revenue and profit estimates already price in this sentiment.
  • “Neutral” or “hold” recommendations: This means analysts have not called for specific buy or sell action. Rather, they give their opinion on the performance of the stock. This rating is given when an analyst expects the stock to perform in a way consistent with the performance of the broader market, or with comparable companies within the analyst’s sector of expertise. This rating could cause the biggest upside or downside from earnings surprises.

In recent years, many analysts have started to add clarity to the expected movement of their stock forecasts using two additional categories:

  • “Underperform” rating: This means the expectation for the stock will perform below the market or sector average. Analysts may use ratings such as "moderate sell,” “weak hold" or “underweight” in place of “underperform.”
  • “Outperform” rating: This is the opposite of an “underperform” rating. Stocks that receive this rating should outperform the market or sector average. Analysts may also substitute words like “moderate buy,” “accumulate” or “overweight.”

As we noted earlier, analysts take the information they receive from company executives as well as their own boots-on-the-ground research to determine a company’s valuation and to determine the economic value of a business.

If you have a background or interest in finance, you may want to look at a company’s balance sheet and do your own calculations. For example, a company’s price-to-earnings (P/E) ratio can be a clue as to whether you should buy a stock. What is price-to-earnings ratio, exactly? That’s when you can rely on the calculations provided by analysts. Here’s a look at some of the more popular valuation models. 

Market Capitalization

You can calculate a company’s market capitalization (or market cap) by multiplying the company’s share price by the total number of shares outstanding. 

For example, on November 7, 2022, The Coca-Cola Company (NYSE: KO) had a share price of $59.45 and 4,324,513,000 shares outstanding. The company’s market cap is determined by the formula 59.45 x 4,324,513,000 to arrive at the company’s market cap of just over $257 billion.

Times Revenue Method

This method assigns a multiplier to a company’s revenues generated over a period of time. The multiplier takes into account the company’s industry and current economic conditions. Tech companies typically have larger multiples than, say, utility companies. 

Earnings Multiplier

This method is similar to the times revenue method but puts the multiplier on earnings instead of revenue. Earnings tend to be a more accurate indicator of a company’s future success than revenue. The earnings multiplier is assigned to a company’s future cash flow that could be invested at the current interest rate over a specified period of time (usually 12 months). 

Discounted Cash Flow (DCF) Method

The discounted cash flow method, a commonly used model, looks similar to the earnings valuation model in that it seeks to project future cash flows to the current market value of the company. This model takes inflation into account. 

Book Value

A company’s book value measures the value of the equity that shareholders have in a company. Book value, shown on a company’s balance sheet, subtracts a company’s total liabilities from its total assets. 

How Much Weight Should Investors Give to Earnings Surprises

The answer to this question depends on what you believe about the accuracy of the earnings estimates. First, consider the accuracy of the information offered by the company. It has become increasingly common for companies to deliver preemptive earnings announcements. 

In the best-case scenario, you may consider it a step toward transparency. On the other hand, analysts can lower expectations that the company can then beat. 

Another factor is analyst objectivity. Prior to the dot-com crash of 2000, brokerage houses and other firms received “soft money” as compensation which led analysts to provide research and issue better ratings than a company would have otherwise merited. One regulation that has emerged since the dot-com crash requires analysts to use commonly accepted valuation techniques in their analysis, such as the factors listed above. This ensures that the methodology they use to assign a value to the company follows generally accepted accounting principles (GAAP). 

However, a more fundamental reason for analysts to be as accurate as possible is their own credibility and that of their firm. To that end, MarketBeat provides an analyst rankings tool that displays the average return on investment (ROI) for every analyst that made a “buy” or “strong buy” recommendation. Investors can sort results by country, sector and market cap. 

Use Earnings Surprises to Your Advantage

An earnings surprise occurs when the revenue and/or profit that a company reports exceeds or falls short of analysts’ estimates. When this occurs, it usually has a proportionate effect on a company’s stock price. That means the larger the beat or miss, the higher or lower the stock price can move.

Analysts use the information they have gathered from closely following the companies to provide investors with accurate revenue and earnings estimates. For a variety of reasons, their numbers may understate or overstate a company’s actual results. 

Use these estimates as a guide and prepare yourself to rethink your own ideas about the company if the earnings report delivers results that contradict your reasons for taking a long or short position in a stock. 

More Earnings Resources from MarketBeat

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