GME's past earnings surprises do not consistently predict its future performance. This is evident from the backtest results for both earnings beat and miss expectations.
- Earnings Beat Expectations: When GME's earnings exceeded expectations, the 3-Day win rate was 42.86%, the 10-Day win rate was 57.14%, and the 30-Day win rate was 57.14%. Although the 30-Day return was positive at 27.79%, with a maximum return of 14.64% over 30 days, the 3-Day return was negative at -2.22%, indicating that immediate positive gains are not guaranteed.
- Earnings Miss Expectations: In contrast, when GME's earnings fell short of expectations, the 3-Day win rate was 66.67%, the 10-Day win rate was 50.00%, and the 30-Day win rate was 58.33%. The 10-Day return was 9.42%, and the 30-Day return was 12.20%, with a maximum return of 31.52% over 30 days. This suggests that GME's stock tends to perform better in the medium to long term after earnings misses.
In conclusion, while GME's stock has shown positive returns in the medium to long term after earnings misses, it does not guarantee immediate positive gains. The variability in performance across different time frames highlights the complexity of using earnings surprises as the sole predictor of future performance.
3/31/2025 06:20am
