Guess Inc. (NYSE:GES) is expected to report fiscal fourth-quarter earnings on Wednesday, March 20th. The whisper number is $0.88, one cent ahead of analysts' estimate. GES has a 71% positive surprise history, having topped the whisper number in five of the seven earnings reports for which we have data.
- Beat whisper: 5 quarters
- Met whisper: 0 quarters
- Missed whisper: 2 quarters
Our primary focus is on post-earnings price movement. Knowing how a stock price will likely 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 30-trading-day time frame:
Click to enlarge images.
The strongest price movement of -15.7% comes within 20 trading days when the company reports earnings that beat the whisper number, and -5.1% within 30 trading days when the company reports earnings that miss the whisper number (negative reactor). The average price reaction is consistent (negative) through 30 trading days.
The table below indicates the most recent earnings reports and short-term price reaction:
In the comparable quarter last year, the company reported earnings that were three cents short of the whisper number. Following that report, the stock realized a 0.2% gain in five trading days. Last quarter, the company reported earnings one cent short of the whisper number. Following that report, the stock realized a 5.9% gain in after-hours trading, but lost 8.6% in 10 trading days. Historical data indicates the stock sees a short-term negative reaction when reporting earnings.
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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 come 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. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.