Buckle up: Stocks like Netflix and Roku go absolutely bonkers during earnings season

Investing

An employee rings up a customer’s merchandise at The Container Store in Chicago, Illinois.

Scott Olson | Getty Images

There’s a group of stocks that tend to rise or fall dramatically following their earnings report.

Bespoke Investment Group analyzed the most volatile names on earnings, looking at companies that have been publicly traded for at least five years. Container Store, which went public in 2013, sees the biggest moves of that group historically, with an average one-day change of 17.6% in either direction. Netflix is another big mover on the list with an average 12.8% rise or fall on earnings days.

When the list included companies with only five years of earnings reports, or 20 quarters, Bespoke founded more volatility. Yelp tends to see 15.18% moves after earnings while online travel company Travelzoo also saw big moves with an average one-day change of 13%.

When the time frame got even lower, including companies with as few as six quarters of reports, the moves were even more dramatic. Roku, which has been public for seven quarters, on average sees 25% swings in the day after it reports.

Bespoke looked at how these stocks moved on the first trading day after the report. If a company reports in the morning, it included the price change for that day and if it reported after the closing bell, they used price changes in the following trading day.

Earnings season fully kicks off next week with Citi results out on Monday, followed by other major Wall Street banks throughout the week. Microsoft, UnitedHealth, IBM, Philip Morris, United Airlines and Netflix also report second-quarter results.

There could be more volatility than usual this earnings season. Because of uncertainty around trade wars and global growth, a bulk of U.S. companies are lowering the bar for their second-quarter earnings. Of the 114 companies that have issued earnings guidance for the period, 77% have issued negative forecasts, according to data from FactSet.

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