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Earnings Date - Meaning and How Investors Can Use It

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When it comes to the stock market, sometimes you might hear the term "earnings date" mentioned.

This article will explain what an earnings date is and how investors might be able to benefit from using it.

 

What is an Earnings Date?

An earnings date is typically considered to be the date that a company publicly announces its earnings. This is also referred to as a company "reporting earnings".

Many companies in the US stock market make earnings announcements once per quarter, meaning that there are typically four earnings dates per year for those companies.

Earnings announcements include key information about the company's recent financial performance, such as sales and profits. They also typically include forecasts about future financial performance.

Earnings announcements are typically accompanied by commentary from the company that explains the earnings performance and speaks to future earnings prospects.

Many stock charts have a depiction of when an earnings date occurs, such as the one in the image above. The red phone icon at the bottom of the image indicates an earnings date.

In this case, it shows Apple had an earnings date on Aug 1 and reported earnings of $2.40 per share.

 

Why Does an Earnings Date Matter?

Earnings announcements can cause a company’s stock price to change abruptly and become volatile, so earnings dates are closely monitored by some investors.

For short-term traders, like swing traders, it can be especially important to be aware of earnings dates. If the stock price becomes volatile on a short-term trade, it could cause a major surge in the annualized return on investment, for better or worse.

Look at this stock chart for Tesla:

You can see that right after their earnings date, the stock price jumped 10% overnight.

That demonstrates not only the potential price volatility associated with an earnings date, but also the gap risk involved. The price of a stock can make big moves outside of market hours at times when an investor doesn't have a way to make transactions.

In short, holding a stock or option position through an earnings date comes with both risk and potential reward due to the increased chance of a price burst.

 

How Do You Find Stocks With Earnings Dates?

You can find them by using our Earnings Date scanner. It's a free tool we offer here at Stock Market Guides. It uses our proprietary scanning technology to find stocks that have earnings dates the next day.

Here's how the scanner results look:

 

That tool ensures that you don't have to waste time flipping through stock profiles manually to find stocks with an earnings date tomorrow.

 

How Well Do Earnings Date Trades Actually Work?

The idea of doing earnings date trades sounds nice to many people because it offers a clear, easy-to-understand way to find an investment idea.

But does it actually work? Can traders indeed generate profits from buying stocks that are about to report earnings?

That's exactly what our company can help answer for you, since our scanner technology has allowed us to do our own research on that precise question.

The answer is that investments based on an earnings date are not always profitable, but for certain stocks they might indeed have a track record of success according to our backtest research.

Here is some data that shows how a proprietary earnings date investment strategy we created has performed historically according to backtests:

 

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Anyone who signs up for our stock scanner service will be able to see stocks that qualify for that trading strategy in real time.

 

Learning More About Earnings Dates

You can contact us any time if you would like to ask any questions about earnings dates or anything else related to the stock market.