Real Surprises

There is no statistical advantage to buying based on beating consensus estimates - but there is power in the sentiment

The Earnings Whisper Power Rating is a comprehensive tool that reflects the magnitude of an earnings surprise relative to investor expectations, compressed into a single number to give traders an unparalleled edge in their short-term trades lasting up to a week. Stocks of companies that beat or miss consensus estimates have no directional bias in the short-term ... but the Power Rating dramatically changes that!

From December 17, 2002 until April 8, 2025, we have measured the power of 177,667 earnings releases. If you had randomly bought any of them at the open after their earnings release and held for one week, you would have averaged -0.0%. During the same period, there were 11,091 that measured a Power Rating of less than 30 and they averaged a decline of 1.6% for the week. On the other hand, there were 13,184 with a Power Rating of 70 or higher, and they averaged a 1.5% weekly gain.