Midterms Spark Rally, But Earnings Send Trendy Stocks Whipsawing

Ryan McQueeney
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On today’s episode of Free Lunch, Ryan McQueeney discusses the results of the midterm elections and explains why earnings results have sent several trendy stocks—including Turtle Beach, Match Group, and Twilio—flying in different directions. He also provides a brief preview of upcoming earnings from Wynn Resorts and Qualcomm.

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Free Lunch is presented by Zacks Investment Research. It is streamed live, four times per week, and features breaking news and analysis from Zacks strategists. Free Lunch is available on YouTube, Facebook Live, Twitter, Ustream, and more.

U.S. stocks moved sharply higher in morning trading Wednesday, as Wall Street saw what it expected from the midterms and investors could collectively move past the uncertainty of the election cycle.

This broad rally did not guarantee gains for those on the earnings front, however. A number of notable companies that reported either Tuesday afternoon or Wednesday morning were plummeting in morning trading, with investors apparently only willing to reward the strongest beat-and-raise quarters.

For instance, video game headset maker Turtle Beach HEAR notched revenue growth of 107% and said that it has captured 490 basis points of market share so far this year. But investors were not convinced, and the one-time momentum darling fell about 13% in morning trading today.

Another company witnessing similar volatility is Match Group MTCH. The Tinder parent company reported a comfortable earnings beat and saw its top line improve by 49% from the prior-year quarter, but soft guidance for the current quarter battered shares to the tune of an 18% early morning loss.

Luxury brand Michael Kors KORS is also watching its stock sell off after reporting before the bell Wednesday. The company topped earnings estimates, and even though its pending of acquisition of Versace should open up key growth avenues soon, a rare revenue miss sent shares tumbling about 15% shortly after the open.

Nevertheless, things were not all bad for the trendy stocks. Cloud-based automated messing service Twilio TWLO was absolutely skyrocketing in morning trading after its report, as the young firm reported better-than-expected results and guidance. Shares of the San Francisco-based company added more than 30% in morning hours.

This type of positive post-earnings momentum will hope to be matched by those reporting after the bell today, including Wynn Resorts WYNN and Qualcomm QCOM. Interested in hearing more about these upcoming reports, or the stocks that are moving dramatically after already reporting? Make sure to check out today’s episode of Free Lunch!

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Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
Match Group, Inc. (MTCH) : Free Stock Analysis Report
Twilio Inc. (TWLO) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Turtle Beach Corporation (HEAR) : Free Stock Analysis Report
Michael Kors Holdings Limited (KORS) : Free Stock Analysis Report
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