Does The Netflix Whisper Number Indicate Investor Confidence?
Netflix (NASDAQ:NFLX) reports earnings after the bell Tuesday, January 20th. The whisper number is $0.47, two cents ahead of the analysts’ estimate and showing some confidence from the WhisperNumber community. Whispers range from a low of $0.45 to a high of $0.48. Netflix has a 68% positive surprise history (having topped the whisper in 15 of the 22 earnings reports for which we have data).
– Beat whisper: 15 qtrs
– Met whisper: 3 qtrs
– Missed whisper: 4 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 analyze 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 -1.3% comes within one trading day when the company reports earnings that beat the whisper number, and -7.2% within twenty trading days when the company reports earnings that miss the whisper number. While the strongest price moves are negative, the overall average post earnings price move is ‘as expected’ (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.
The table below indicates the most recent earnings reports and short-term price reaction:
The company has reported earnings ahead of the whisper number in one of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings fourteen cents ahead of the whisper number. Following that report the stock realized a 3.4% gain in five trading days. Last quarter the company reported earnings five cents short of the whisper number. Following that report the stock realized a 15.4% gain in twenty trading days. Overall historical data indicates the company to be (on average) an ‘as expected’ price reactor when the company reports earnings.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, blogger WhisperNumber has a total average return of -3.3% and a 33% success rate. WhisperNumber is Ranked #3143 out of 4128 Bloggers