4 Stocks: 1 Hot, 3 Not

Why Do Some Stocks Drop After Good Earnings?

When a stock falls after a company announces earnings results that meet or beat expectations, chances are sentiment was excessively bullish heading
into the event, which creates high expectations of a blowout report.

High expectations can be a dangerous situation if the company disappoints the market by merely meeting expectations. They can also create what is
called a “crowded trade,” which leaves little money to flow into the stock after the earnings release, no matter how positive the report.

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Next: Why Do Some Stocks Rally After Only Meeting Expectations?