Amazon.com (NASDAQ:AMZN), which reports after the close, has beaten earnings estimates 59% of the time over the last 10 years, and it has beaten revenue estimates 71.8% of the time. While AMZN has guided higher on 17.9% of its reports, it has actually lowered guidance on three of its last five reports.
In terms of price reaction, AMZN goes up more than it goes down on its report days. (For companies that report after the close -- like AMZN -- we use the next day's change when analyzing price reaction.) As shown, AMZN has averaged a one-day gain of 1.03% on its report days over the last 10 years. When the stock has beaten earnings estimates, it has averaged a big gain of 4.96% on the day. When it has missed earnings estimates, it has averaged an even bigger decline on the day (-6.96%).
What's interesting about AMZN is how it trades after its initial gap higher or lower at the open following earnings. For the typical stock, most of its earnings-related gains or losses are achieved in after-hours or pre-market trading before the stock actually opens. But some stocks have historically done very well or very poorly on their report days even after their initial gap higher or lower. In the case of AMZN, when it has opened higher on its past earnings report days, it has averaged a further gain of 2.83% from the open to the close of trading. And when it has opened lower on earnings, it has typically reversed and gone higher for an average gain of 0.92% from the open to the close of trading.
Obviously, not every stock follows its typical script on each earnings report. In the case of AMZN, the stock opened higher by $22 on its last earnings report and then it fell $10 from the open to the close to finish up $12 on the day. Over time, however, there are money-making opportunities out there just by getting a feel for how stocks typically trade around their earnings reports.