The backtest results reveal that BABA's stock shows a 50% win rate consistently across 3-day, 10-day, and 30-day periods following earnings misses, with a slight positive return of 0.51% in 3 days but negative returns of -0.84% and -2.70% over 10 and 30 days respectively. This indicates that while initial reactions are mixed, the stock tends to decline moderately over the medium term after earnings misses.

This pattern suggests subdued investor confidence post-earnings disappointments, leading to gradual downward pressure on price.

Investors should be cautious holding BABA following earnings misses, as extended downside risk exists over a month.

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The backtest results show that when the Broadline Retail Industry misses earnings expectations, there is effectively no impact on the industry’s stock returns, with a maximum return of -0.89% occurring immediately on the event day. This indicates that such earnings misses do not materially influence investor behavior or stock performance in this sector. As a result, investors might consider that earnings misses in the Broadline Retail Industry are not significant trading signals and should weigh other factors when making investment decisions.

Backtest BABA Earning Missed Expectations

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