Theoretical Earnings Scenarios for a Fast Growing Company
Company Name: ?
Stock Exchange Listed On: ?
Ticker Symbol: ?
Growth Prospects: Fast Grower (30%-plus compounded next 5 years)
Industry Prospects: Fast Growing (30%-plus next 5 years)
Stock Valuation: P/E > 80, FWD P/E > 45, PEG > 1.80, P/S > 15, FWD P/S > 10, P/B > 10
“Slightly” means less than 10% surprise
“Significantly” means greater than 25% surprise
Any suprise range between "Slightly" and "Significantly" falls under the "ambiguous zone" - i.e., the expected result on the underlying stock is open to interpretation.
~~~
1.
CAUSE:
Company beats estimates (slightly) and raises forward quarter guidance (slightly), therefore, fiscal raised (slightly).
EFFECT:
Stock rallies ~7% in extended (after hours) and/or pre-market trading and following trading day.
~~~
2.
CAUSE:
Company beats estimates (slightly) and raises forward quarter guidance (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
3.
CAUSE:
Company beats estimates (significantly) and raises forward quarter guidance (slightly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
4.
CAUSE:
Company beats estimates (significantly) and raises forward quarter guidance (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 30% in extended (after hours) and/or pre-market trading and following trading day.
~~~
5.
CAUSE:
Company beats estimates (slightly) and forward quarter guidance inline, therefore, fiscal raised (slightly).
EFFECT:
Stock rallies 5% in extended (after hours) and/or pre-market trading and following trading day.
~~~
6.
CAUSE:
Company beats estimates (significantly) and forward quarter guidance inline, therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
7.
CAUSE:
Company beats estimates (slightly) and lowers forward quarter guidance (slightly), therefore, fiscal inline.
EFFECT:
Stock tanks 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
8.
CAUSE:
Company beats estimates (slightly) and lowers forward quarter guidance (significantly), therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks > 25% in extended (after hours) and/or pre-market trading and following trading day.
~~~
9.
CAUSE:
Company beats estimates (significantly) and lowers forward quarter guidance (slightly), therefore, fiscal raised (significantly).
EFFECT:
Stock moves 5% in either direction in extended (after hours) and/or pre-market trading and following trading day.
~~~
10.
CAUSE:
Company beats estimates (significantly) and lowers forward quarter guidance (significantly), therefore, fiscal inline.
EFFECT:
Stock tanks 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
11.
CAUSE:
Company inline with estimates and raises guidance forward quarter (slightly), therefore, fiscal raised (slightly).
EFFECT:
Stock rallies 5% in extended (after hours) and/or pre-market trading and following trading day.
~~~
12.
CAUSE:
Company inline with estimates and raises guidance forward quarter (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
13.
CAUSE:
Company inline with estimates and inline with guidance forward quarter, therefore, fiscal inline.
EFFECT:
Stock tanks 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
14.
CAUSE:
Company inline with estimates and lowers guidance forward quarter (slightly), therefore, fiscal lowered (slightly).
EFFECT:
Stock tanks 20% in extended (after hours) and/or pre-market trading and following trading day.
~~~
15.
CAUSE:
Company misses estimates (slightly) and raises forward quarter guidance (slightly), therefore, fiscal inline.
EFFECT:
Stock tanks 5% in extended (after hours) and/or pre-market trading and following trading day.
~~~
16.
CAUSE:
Company misses estimates (slightly) and raises forward quarter guidance (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
17.
CAUSE:
Company misses estimates (significantly) and raises forward quarter guidance (slightly), therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks 25% in extended (after hours) and/or pre-market trading and following trading day.
~~~
18.
CAUSE:
Company misses estimates (significantly) and raises forward quarter guidance (significantly), therefore, fiscal inline.
EFFECT:
Stock trades 10% in either direction in extended (after hours) and/or pre-market trading and following trading day.
~~~
19.
CAUSE:
Company misses estimates (slightly) and inline with forward quarter guidance, therefore, fiscal lowered (slightly).
EFFECT:
Stock tanks 15% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
20.
CAUSE:
Company misses estimates (significantly) and inline with forward quarter guidance, therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks 30% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
21.
CAUSE:
Company misses estimates (slightly) and lowers forward quarter guidance (slightly), therefore, fiscal lowered (slightly).
EFFECT:
Stock tanks 25% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
22.
CAUSE:
Company misses estimates (significantly) and lowers forward quarter guidance (significantly), therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks > 40% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
23.
CAUSE:
Company beats estimates (slightly) and provides no forward guidance, therefore, fiscal is inline.
EFFECT:
Stock moves in trading range 5% in either direction in extended (after hours) and/or pre-market trading and the following trading day.
~~~
24.
CAUSE:
Company beat estimates (significantly) and provides no forward guidance, therefore, fiscal is generally positive and assumed to be inline.
EFFECT:
Stock rallies 10% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
25.
CAUSE:
Company misses estimates (slightly) and provides no guidance, therefore, fiscal is lowered (slightly).
EFFECT:
Stock tanks 20% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
26.
CAUSE:
Company misses estimates (significantly) and provides no guidance, therefore, fiscal is lower (significantly).
EFFECT:
Stock tanks 40% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
27.
CAUSE:
Company delays filing 10-Q or 10-K with SEC and issues a press release with an explanation. The explanation has something to do with accounting or legal changes (i.e., Sarbanes-Oxley), and will file within a 3-day grace period on a “Pro-Forma” basis.
EFFECT:
Stock moves in trading range 5% in either direction until the filing.
~~~
28.
CAUSE:
Company indefinitely delays filing 10-Q or 10-K with SEC because of a newly issues internal/external investigation into the company’s accounting, and issues a press release saying that it will restate the last several quarters/years worth of financials upon the conclusion of the investigation. As a result the company faces a potential delisting from a major exchange (NYSE or NASDAQ) and to resume trading in the pink sheets. (Ticker is first changed with an added “E” extension at the end of the symbol, and then changed to a “.PK” if the financials are not filed within a short period.) Also, the company’s revolving bank credit facility is frozen because of this, and all outstanding balances become due within a very short period, factoring in 1 or maximum 2 possible extensions given to the company by the bank to present the cash. A potential bankruptcy situation may exist, especially if the company has lots of debt and cash flow from operations is insufficient to meet the interest payments.
EFFECT:
Stock tanks severely > 45% in extended (after hours) trading and/or pre-market trading and following trading day.
~~~
29.
CAUSE:
Company reports inline with estimates, but provides no forward guidance, therefore, fiscal assumed inline to lowered.
EFFECT:
Stock tanks 15% in extended trading and/or pre-market and the following trading day.
Stock Exchange Listed On: ?
Ticker Symbol: ?
Growth Prospects: Fast Grower (30%-plus compounded next 5 years)
Industry Prospects: Fast Growing (30%-plus next 5 years)
Stock Valuation: P/E > 80, FWD P/E > 45, PEG > 1.80, P/S > 15, FWD P/S > 10, P/B > 10
“Slightly” means less than 10% surprise
“Significantly” means greater than 25% surprise
Any suprise range between "Slightly" and "Significantly" falls under the "ambiguous zone" - i.e., the expected result on the underlying stock is open to interpretation.
~~~
1.
CAUSE:
Company beats estimates (slightly) and raises forward quarter guidance (slightly), therefore, fiscal raised (slightly).
EFFECT:
Stock rallies ~7% in extended (after hours) and/or pre-market trading and following trading day.
~~~
2.
CAUSE:
Company beats estimates (slightly) and raises forward quarter guidance (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
3.
CAUSE:
Company beats estimates (significantly) and raises forward quarter guidance (slightly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
4.
CAUSE:
Company beats estimates (significantly) and raises forward quarter guidance (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 30% in extended (after hours) and/or pre-market trading and following trading day.
~~~
5.
CAUSE:
Company beats estimates (slightly) and forward quarter guidance inline, therefore, fiscal raised (slightly).
EFFECT:
Stock rallies 5% in extended (after hours) and/or pre-market trading and following trading day.
~~~
6.
CAUSE:
Company beats estimates (significantly) and forward quarter guidance inline, therefore, fiscal raised (significantly).
EFFECT:
Stock rallies > 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
7.
CAUSE:
Company beats estimates (slightly) and lowers forward quarter guidance (slightly), therefore, fiscal inline.
EFFECT:
Stock tanks 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
8.
CAUSE:
Company beats estimates (slightly) and lowers forward quarter guidance (significantly), therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks > 25% in extended (after hours) and/or pre-market trading and following trading day.
~~~
9.
CAUSE:
Company beats estimates (significantly) and lowers forward quarter guidance (slightly), therefore, fiscal raised (significantly).
EFFECT:
Stock moves 5% in either direction in extended (after hours) and/or pre-market trading and following trading day.
~~~
10.
CAUSE:
Company beats estimates (significantly) and lowers forward quarter guidance (significantly), therefore, fiscal inline.
EFFECT:
Stock tanks 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
11.
CAUSE:
Company inline with estimates and raises guidance forward quarter (slightly), therefore, fiscal raised (slightly).
EFFECT:
Stock rallies 5% in extended (after hours) and/or pre-market trading and following trading day.
~~~
12.
CAUSE:
Company inline with estimates and raises guidance forward quarter (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies 15% in extended (after hours) and/or pre-market trading and following trading day.
~~~
13.
CAUSE:
Company inline with estimates and inline with guidance forward quarter, therefore, fiscal inline.
EFFECT:
Stock tanks 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
14.
CAUSE:
Company inline with estimates and lowers guidance forward quarter (slightly), therefore, fiscal lowered (slightly).
EFFECT:
Stock tanks 20% in extended (after hours) and/or pre-market trading and following trading day.
~~~
15.
CAUSE:
Company misses estimates (slightly) and raises forward quarter guidance (slightly), therefore, fiscal inline.
EFFECT:
Stock tanks 5% in extended (after hours) and/or pre-market trading and following trading day.
~~~
16.
CAUSE:
Company misses estimates (slightly) and raises forward quarter guidance (significantly), therefore, fiscal raised (significantly).
EFFECT:
Stock rallies 10% in extended (after hours) and/or pre-market trading and following trading day.
~~~
17.
CAUSE:
Company misses estimates (significantly) and raises forward quarter guidance (slightly), therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks 25% in extended (after hours) and/or pre-market trading and following trading day.
~~~
18.
CAUSE:
Company misses estimates (significantly) and raises forward quarter guidance (significantly), therefore, fiscal inline.
EFFECT:
Stock trades 10% in either direction in extended (after hours) and/or pre-market trading and following trading day.
~~~
19.
CAUSE:
Company misses estimates (slightly) and inline with forward quarter guidance, therefore, fiscal lowered (slightly).
EFFECT:
Stock tanks 15% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
20.
CAUSE:
Company misses estimates (significantly) and inline with forward quarter guidance, therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks 30% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
21.
CAUSE:
Company misses estimates (slightly) and lowers forward quarter guidance (slightly), therefore, fiscal lowered (slightly).
EFFECT:
Stock tanks 25% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
22.
CAUSE:
Company misses estimates (significantly) and lowers forward quarter guidance (significantly), therefore, fiscal lowered (significantly).
EFFECT:
Stock tanks > 40% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
23.
CAUSE:
Company beats estimates (slightly) and provides no forward guidance, therefore, fiscal is inline.
EFFECT:
Stock moves in trading range 5% in either direction in extended (after hours) and/or pre-market trading and the following trading day.
~~~
24.
CAUSE:
Company beat estimates (significantly) and provides no forward guidance, therefore, fiscal is generally positive and assumed to be inline.
EFFECT:
Stock rallies 10% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
25.
CAUSE:
Company misses estimates (slightly) and provides no guidance, therefore, fiscal is lowered (slightly).
EFFECT:
Stock tanks 20% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
26.
CAUSE:
Company misses estimates (significantly) and provides no guidance, therefore, fiscal is lower (significantly).
EFFECT:
Stock tanks 40% in extended (after hours) and/or pre-market trading and the following trading day.
~~~
27.
CAUSE:
Company delays filing 10-Q or 10-K with SEC and issues a press release with an explanation. The explanation has something to do with accounting or legal changes (i.e., Sarbanes-Oxley), and will file within a 3-day grace period on a “Pro-Forma” basis.
EFFECT:
Stock moves in trading range 5% in either direction until the filing.
~~~
28.
CAUSE:
Company indefinitely delays filing 10-Q or 10-K with SEC because of a newly issues internal/external investigation into the company’s accounting, and issues a press release saying that it will restate the last several quarters/years worth of financials upon the conclusion of the investigation. As a result the company faces a potential delisting from a major exchange (NYSE or NASDAQ) and to resume trading in the pink sheets. (Ticker is first changed with an added “E” extension at the end of the symbol, and then changed to a “.PK” if the financials are not filed within a short period.) Also, the company’s revolving bank credit facility is frozen because of this, and all outstanding balances become due within a very short period, factoring in 1 or maximum 2 possible extensions given to the company by the bank to present the cash. A potential bankruptcy situation may exist, especially if the company has lots of debt and cash flow from operations is insufficient to meet the interest payments.
EFFECT:
Stock tanks severely > 45% in extended (after hours) trading and/or pre-market trading and following trading day.
~~~
29.
CAUSE:
Company reports inline with estimates, but provides no forward guidance, therefore, fiscal assumed inline to lowered.
EFFECT:
Stock tanks 15% in extended trading and/or pre-market and the following trading day.
posted by Raphael Blogger at
5:18 PM
