Priceline.com (PCLN) is expected to report fiscal fourth quarter earnings on Tuesday, February 26th. The whisper number is $6.49, five cents behind the analysts' estimate. PCLN has a 62% positive surprise history (having topped the whisper in 21 of the 34 earnings reports for which we have data).
- Beat whisper: 21 qtrs
- Met whisper: 0 qtrs
- Missed whisper: 13 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 look at 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 -4.8% comes within twenty trading days when the company reports earnings that beat the whisper number, and -12.4% within twenty trading days when the company reports earnings that miss the whisper number. Beat or miss the whisper number and the overall average price move is negative.
The table below indicates the most recent earnings reports and short-term price reaction:
The company has had six whisper numbers in the past eight quarters. The five trading day (intra-day) price move in each of the past three quarters is negative. Last quarter the company reported earnings seventy cents ahead of the whisper number. Following that report the stock realized a 10.9% gain in after hours trading, but turned and gave back 5.7% in thirty trading days. The recent post earnings reports price weakness is in-line with the historical averages (based on intra-day price movement).
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Since 1998, WhisperNumber.com has been tracking and publishing "crowd sourced estimates" for earnings. We call these earnings expectations whisper numbers. Our whisper numbers are gained from individual investors and traders just like you who have registered with our site. While the whisper number itself is an important part of our analysis, a company's "price reaction" to beating or missing the whisper number expectation is the key. On average, companies that exceed the whisper are "rewarded," while companies that miss are "punished" following an earnings report.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.