Guides · Stocks, ETFs and markets
Why does a stock move so much after its earnings?
In short: The price reacts mainly to the gap with what was expected, and to the guidance the company gives for what comes next. Good results can push a stock down if they are below expectations or the outlook disappoints.
Expectations
Before results, analysts publish estimates. The market has already priced those expectations in.
Guidance
A company lowering its annual targets can see its stock fall even after a decent quarter.
Volatility
Earnings periods are often a stock's most volatile: the radar's expected volatility partly accounts for that.