Gilead Sciences Inc. (NASDAQ:GILD) is expected to report fiscal first quarter earnings on May 2. The whisper number is $0.51, two cents ahead of the analysts' estimate. GILD has a 71% positive surprise history (having topped the whisper in 20 of the 28 earnings reports for which we have data).
- Beat whisper: 20 qtrs
- Met whisper: 1 qtrs
- Missed whisper: 7 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 time frame:
The strongest price movement of +0.8% comes within ten trading days when the company reports earnings that beat the whisper number, and +1.5% within ten trading days when the company reports earnings that miss the whisper number. While the strongest price moves are positive, the overall price movement is inconsistent through thirty trading days when the company reports earnings.
The table below indicates the most recent earnings reports and short-term price reaction:
In the comparable quarter last year, the company reported earnings four cents short of the whisper number. Following that report the stock realized a 0.4% loss in after hours trading, and dropped an additional 2.1% in five trading days. Last quarter the company reported earnings three cents ahead of the whisper number. Following that report the stock realized a 1.4% gain in after hours trading, and added an additional 1.5% in five trading days. Although the past four quarters do show a pattern of an 'as expected' price reaction through five trading day, overall historical data indicates the company to be (on average) an 'inconsistent' price reactor through thirty trading days when the company reports 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 are gained from individual investors and traders just like you that 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.