Getting Ahead of That Post-Earnings Pop I didn’t go to any Super Bowl parties this year; football isn’t really my thing. But I do make room for another type of “watch party” on my calendar: earnings watch parties. That may not seem as exciting to you, but as a data and investing nerd, earnings season is more important than football season. Results can be good or bad for a stock, depending on company performance and what was expected from that performance. Let’s take a quick look at this earnings season so far, using data from the always excellent FactSet Earnings Insight: - The blended year-over-year earnings growth rate (combining results already out with estimates for results still to come) for the S&P 500 is 16.4%. If that holds, it will be the highest since Q4 2021.
- Health Care, Financials, and Consumer Discretionary sectors are the largest contributors to the combined increased revenue growth, so far.
- The estimated year-over-year revenue growth is 5.2%.
Perhaps most importantly, for the fourth quarter in 2024, 77% of S&P 500 companies have report positive earnings surprises while 63% have positive revenue surprises. Positive surprises mean they beat analysts’ estimates. It’s the thing that gets me excited most during my earnings watch parties. That’s because when you have positive surprises, the company’s shares can POP. Let’s look at three examples from this earnings season and what their scores tell us about what to expect going forward. | Recommended Link | | | | We're on the cusp of the biggest market disruptions in modern history, and its impact on American retirements is already in motion. The 1% are about to exploit a massive “transfer of wealth” at the cost of your own personal savings. Depending on how you prepare, this tipping point could either be a grave danger or an incredible opportunity. Here's what you need to know. |  |
CVS Health (CVS) 
CVS Health (CVS) reported fourth-quarter earnings Wednesday before the open. Earnings of $1.19 per share beat the 93 cents analysts predicted. The company also beat revenue expectations with $97.71 billion versus estimates of $97.19 billion. Revenue increased 4.2% from last year due to growth in its pharmacy business and insurance unit. This all lead to shares surging in premarket trading Wednesday, up over 9% immediately following the news, then going on to pop 15% for the trading day. Despite the beat and price surge, CVS still isn’t a buy in my system. I like to see a Quantum Score between 70 and 85, and CVS’s score of 58.6 is lower than I would go – especially with weak fundamentals of 45.8. The company’s technicals are decent, in part from this week’s pop. Expedia (EXPE) 
Expedia (EXPE) shot even higher after it reported earnings last Thursday. Shares exploded over 17% the next day to hit a nearly three-year high. This surge came after EXPE reported a strong fourth quarter that beat analysts’ estimates, which was attributed to high travel demand. Expedia has a strong Quantum Score of 79.3, so it does sit in the buy zone. One thing to keep in mind is that it’s the technicals are high at 88.2, again because of last week’s pop. The Fundamental Score of 66.7 is quite good, too, just not ideal. My system picked up two Big Money buy signals in the two days after earnings – the first signals since November. Doximity (DOCS) 
Doximity (DOCS) may be a company you haven’t heard of, but its recent moonshot after earnings is one to take note of. The company is a digital platform for medical professionals to help them stay current on medical news, manage paperwork, conduct telehealth appointments, and find referrals. DOCS reported earnings last week and exploded 36% higher the next day. Earnings of 45 cents per share beat estimates of 34 cents, while revenue of $168.6 million beat estimates of $152.8 million – a 25% increase from the same period last year. This is the type of hidden gem that my quantitative analysis stock-picking system can lead me to. DOCS showed up in the data last summer, and I recommended DOCS to my Quantum Edge Pro subscribers back in August 2024. Shares have more than doubled since then, and we took the opportunity to bank profits on a portion of our shares. As you can see, the Technical Score is very high at 94.1, which qualifies as overbought in my system and indicates some sort of pullback may be coming. It also boosts the Quantum Score all the way up to 86.2, which is above the ideal buy range. Still, it’s a great company and one that I expect will continue to do well over time. It has the fundamentals, technical, and Big Money inflows that make higher prices likely. Anticipating the Pop To help identify stocks likely to move higher, not just on these earnings pops but well into the future, I recommend three rules of thumb to follow: - Go into earnings season already owning fundamentally superior stocks. I’ve found through my research that sales growth, earnings growth, profit margin, debt levels, and valuation are among the most predictive fundamental characteristics of future share prices.
If you own the best and strongest businesses, you’ve got very good odds of an upside surprise or at least a continuation of growth. - Don’t buy right before earnings. Earnings are often binary events, and surprises can be negative as well as positive. Wall Street can also overreact one way or the other. (Shocking, I know.) If you don’t already own a stock right before earnings, take a seat, grab your popcorn, and watch the show…
- Let data be your guide. Once the report is out, you have the information you need to make an informed decision. If the company’s fundamentals are strong, its price action is favorable, and Big Money is flowing in, odds are high you have a winner. I can count on a roughly 70% probability based on back testing and use of my Quantum Edge System.
As with Super Bowls, my “team” doesn’t win every single time. But with those criteria, I win much more often than I lose. And that’s why I like earnings watch parties so much. Click here to learn how you can join Quantum Edge Pro and not miss out on those superior stocks. Talk soon, 
Jason Bodner
Editor, Jason Bodner’s Power Trends Disclosure: On the date of publication, Jason Bodner held a position in Expedia (EXPE) mentioned in this article. | 
