Betting On A Stock That Plummeted Post-Earnings: Trying To Avoid Repeating Two Big Mistakes
Portfolio Pulse from David Pinsen
The article discusses the risks of buying stocks that plummet post-earnings, using Snowflake, Inc. (SNOW) and Lululemon Athletica, Inc. (LULU) as examples. Both stocks experienced significant drops after earnings despite double beats, leading to worthless options trades. The author outlines mistakes made and changes in strategy for a new trade on another stock that also dropped post-earnings.
June 18, 2024 | 2:17 pm
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NEGATIVE IMPACT
Lululemon Athletica, Inc. (LULU) saw a 36% drop post-earnings despite a double beat. The stock's valuation is moderate, with an overall rating of 3.
The significant post-earnings drop and moderate valuation rating suggest a negative short-term impact on LULU's stock price.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Snowflake, Inc. (SNOW) experienced a significant drop of about 46% post-earnings despite a double beat on earnings and revenues. The stock's valuation remains low, with an overall rating of 0.
The significant post-earnings drop and low valuation rating indicate a negative short-term impact on SNOW's stock price.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80