Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether itβs a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 π
*Click the image to enlarge it
On Thursday, we heard from Darden Restaurants $DRI and FactSet Research Systems $FDS, which both reported mixed headline results.
The stocks suffered a significant decline and had extremely negative reaction scores of -4.82 and -7.51, respectively.
These were some of the most bearish earnings reactions we've seen in weeks.
Now let's dive into the fundamentals and technicals π
DRI snapped a 3-quarter beat streak π»
Darden Restaurants had a -7.7% post-earnings reaction, and here's what happened:
Total sales were up 10.4% year-over-year, driven by 4.7% same-restaurant sales growth, the Chuy's acquisition, and new restaurant openings.
Bottom-line growth outpaced the top-line, increasing by 12.6% year-over-year.
The management reaffirmed revenue and earnings guidance for the next fiscal year. This came as a significant disappointment to the market, as investors had hoped to see more.
This has been one of the best-performing restaurant names in the market, and it was one of the few to reach a new all-time high this year.
Despite the recent strength, significant changes have occurred. The stock resolved a multi-month distribution pattern with a bearish gap-n-go on the heels of this earnings report.
In addition, the market is once again punishing shareholders for the company's earnings reports, following a nice multi-quarter run of positive earnings reactions.
So long as DRI is trading below 200, the bears are in control, and the path of least resistance is likely to remain lower for the foreseeable future.
FDS suffered its worst earnings reaction since 2012 π»
FactSet Research Systems fell -10.4% following this earnings report, and here's what happened:
GAAP net income skyrocketed 71.6% year-over-year, but their adjusted net income measure was only up 7.3% over the same period.
The company recently hired a new CEO, Sanoke Viswanathan, who shared a new vision to become the leading AI-powered financial intelligence platform during this quarter's presentation.
The management team issued much weaker-than-expected forward guidance, which spooked the market.
This was one of the worst earnings reactions we've seen all quarter, and it happened at a key level of interest. The stock has decisively resolved a multi-year distribution pattern.
It's breaking down spectacularly with its worst earnings reaction in over a decade, and the worst week since 2000.
We think this name is going lower... much lower.
So long as FDS is below 345, the path of least resistance is decisively lower for the foreseeable future.
Happy Friday
-The Beat Team
P.S. At All Star Charts, Ricardo Sarraf is crushing it from the short side, and some of the best trades have come from names like DRI and FDS.
For many investors with portfolios full of long exposure, his bearish trade ideas offer a tremendous hedge.
In ASC's latest Short Report, Rick outlined one of the largest discount store names in the U.S.
