Staples’ Whisper Number Lacking Confidence

Staples (NASDAQ:SPLS) is expected to report earnings on Tuesday. The whisper number is 20 cents, 1 cent behind the analysts’ estimate and showing no confidence from investors. Whispers range from a low of 17 cents to a high of 22 cents. Staples has a 44 percent positive surprise history (having topped the whisper in 21 of the 48 earnings reports for which we have data).

Earnings history:

  • Beat whisper: 21 qtrs
  • Met whisper: 5 qtrs
  • Missed whisper: 22 qtrs

Our primary focus is on post-earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post-earnings price movement within a one and 30 trading day timeframe:

The strongest price movement of +3.9 percent comes within 30 trading days when the company reports earnings that beat the whisper number and -1.2 percent within 30 trading days when the company reports earnings that miss the whisper number. The overall average price move is “as expected” (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.