Get Ready for Google (GOOG)

All eyes will be on Google's (GOOG) earnings report after the close tonight.  From the Bespoke Earnings Report Database, we looked at the trading patterns of the stock on the day following its report since the stock went public in 2004.  Overall, the stock typically trades higher following an earnings report.  Of the 12 quarterly earnings reports the company has released, the stock has closed higher the next day 9 times for an average gain of 3.78%.  However, if it does trade higher, all of the gains usually come in after-hours trading, so unless you own the stock going into the report, you're not going to be able to profit from strong numbers.  When the stock gaps up on earnings, it averages a decline of -1.84% from the open to the close on that day, and a decline of -2.68% one week after the open.  Conversely, of the 3 times that the stock has gapped lower after earnings, it has gone higher from the open to the close twice for an average gain of 45 bps.  In general, traders usually buy the dips and sell the gains once Google (GOOG) opens for trading after reporting earnings.

In the table below, we detail the price changes for each report as well as overall averages to highlight typical patterns.  If you would like to see typical trading patterns for other stocks, contact info@bespokeinvest.com to learn more about The Bespoke Earnings Report Database.