Earnings misses are punished harder than beats are rewarded
Over the last eight quarters, a miss cost a median 2.2% around the report, while a beat earned +0.8%. Of 4,954 beats, 45% were still followed by a fall.
Price reaction to beats and misses
Median % move, close before the report to close one session after
Latest quarter: reports to 3 Sep 2026, prices to 1 Oct 2026. Reports exactly in line are left out.
What it means · inference
- A beat is expected and largely priced in
- A miss is news: a 2.7x larger move
- The real bar sits above published consensus
For investors · general, not personal financial advice
- Holding through reports carries lopsided downside
- Expectations, not results alone, drive the reaction
What would change it
- A smaller miss penalty after a de-rating
- Beats earning more than misses cost for a season
Method
- What is measured: Median price move from the close before the report date to the close one session after it, for EPS beats and misses, by calendar quarter of the report, 2024 Q4 to 2026 Q3 (latest quarter to 3 Sep 2026); reader-safe companies.
- Window: adjusted close on the last session before the report date to the adjusted close on the first session after it, so pre-open and after-close reports are both captured.
- Beat / miss = positive / negative EPS surprise (adjusted EPS vs consensus). Raw returns: the market move over the same window is shown as a KPI, not subtracted.
- Survivor bias: history is computed on today's reader-safe universe (828 names), so companies that left the market earlier are missing and the earlier years describe today's survivors, not the market as it was.
Sources
- MCH research warehouse, quarterly earnings reports (Alpha Vantage: reported vs estimated EPS).
- MCH research warehouse, daily adjusted closes (Alpha Vantage); prices through 1 Oct 2026.
Universe
| Names in the published feed | 886 |
| Excluded: held, suspended, withdrawn, deferred, deal-pending or pending review | 58 |
| Reader-safe universe | 828 |
| Reports in the window with a surprise | 6501 |
| Dropped: no price either side of the report | 9 |
| Dropped: exactly in line | 286 |
| Reports used | 6206 |
| Used in this exhibit | 825 |
Names whose rating is held, suspended, withdrawn, deferred or under a pending deal are excluded from every exhibit, so no held output appears here.
General and impersonal investment research. Not personal financial advice. Forecasts, valuations and model outputs are estimates and may be wrong. See Investment Disclaimer.
MCH Analysis is a general investment-research publication of MCH Advisory (Pty) Ltd. It is not personal financial advice and does not take your circumstances into account. MCH is not a licensed financial services provider or a registered investment adviser. Past performance, whether actual or simulated, does not predict future results. Subscriber Agreement | Privacy and Cookie Notice | Research Governance Policies