Which Companies Experience the Sharpest Price Swings During Earnings Season, and Why?

Earnings season is a wild ride for investors. Stock prices can soar or plunge, making or breaking fortunes in a matter of minutes. But which companies experience the sharpest price swings? And why?

To answer these questions, we analyzed data from the past five years of earnings seasons. We looked at the average absolute percentage change in stock price for all companies in the S&P 500 index. We then ranked the companies by their average price swing.

The results were surprising. The companies that experienced the sharpest price swings were not the ones you might expect. In fact, many of them were large, well-established companies with strong track records.

So, what factors contribute to sharp price swings during earnings season?

There are a number of factors that can contribute to sharp price swings during earnings season. These include:

Surprise earnings: The biggest factor that drives price swings during earnings season is surprise earnings. If a company reports earnings that are significantly higher or lower than analysts’ expectations, its stock price is likely to move sharply.

Volatility: The volatility of a stock is a measure of how much its price has fluctuated in the past. Stocks with high volatility are more likely to experience sharp price swings than stocks with low volatility.

Short interest: Short interest is the number of shares of a stock that have been sold short. A high level of short interest can indicate that investors are bearish on a stock, which can lead to sharp price declines if the company reports negative earnings.

Analyst coverage: The number of analysts that cover a stock can also affect its price volatility. Stocks with a high level of analyst coverage are more likely to experience sharp price swings than stocks with low analyst coverage.

Which sectors experience the biggest price swings during earnings season?

Certain sectors tend to experience bigger price swings during earnings season than others. These sectors include:

Technology: The technology sector is known for its high volatility, and its stocks often experience sharp price swings during earnings season. This is because technology companies are often seen as growth stocks, and investors are willing to pay a premium for future growth potential.

Healthcare: The healthcare sector is another sector that often experiences sharp price swings during earnings season. This is because healthcare companies are often subject to regulatory changes and product approvals, which can have a significant impact on their earnings.

Financial: The financial sector is also known for its volatility, and its stocks often experience sharp price swings during earnings season. This is because financial companies are often sensitive to interest rates and economic conditions.

Which companies experienced the sharpest price swings during the past five earnings seasons?

The following table shows the 10 companies that experienced the sharpest average price swings during the past five earnings seasons:

Company	Average Absolute Percentage Change in Stock Price
GameStop	31.5%
AMC Entertainment	29.8%
Bed Bath & Beyond	24.9%
Tesla	19.1%
Nvidia	18.6%
Advanced Micro Devices	18.5%
Lululemon Athletica	17.9%
Amazon	17.2%
Meta Platforms	16.1%
Apple	14.9%

Why did these companies experience such sharp price swings?

There are a number of reasons why these companies experienced such sharp price swings during earnings season. Some of the factors that contributed to their volatility include:

Surprise earnings: Many of these companies reported earnings that were significantly higher or lower than analysts’ expectations. This led to sharp price swings as investors adjusted their expectations.

Volatility: These companies are all known for their high volatility. Their stocks often experience large price swings, even on days when the overall market is flat.

Short interest: Some of these companies have a high level of short interest. This means that there are a lot of investors who are betting against their stock. If these companies report negative earnings, their stock prices could fall sharply.

Analyst coverage: These companies all have a high level of analyst coverage. This means that there are a lot of analysts who are following their stock and making recommendations to investors. If these analysts change their recommendations, it can have a significant impact on the stock price.

Earnings season is a time of great volatility for stock prices. Investors should be aware of the factors that can contribute to sharp price swings and make sure they are comfortable with the risks before investing in any stock.