Earlier this morning on the blog, we made note of today’s earnings triple plays (EPS and sales beat alongside raised guidance) including the terrible stock price reaction pre-market for Beyond Meat (BYND) in spite of these solid quarterly results. To provide an update, BYND gapped down 21.3% at the open today although it has seen a small rally since then; currently down only around 18% from yesterday’s close. Using a screen in our Earnings Explorer database, shown in the tables below, we looked at every earnings triple play since our data begins in 2001. Across the more than eight thousand triple plays, stock price reactions have held a very positive bias. These stocks have gapped up 86% of the time, averaging a 5.12% gain. These stocks have also averaged a full-day and open-to-close gain as well. So any decline let alone one as large as Beyond Meat’s is not common, but also not totally without precedent.
BYND is tied with Anadigics’s (ANAD) response to earnings in October of 2007 (ANAD is no longer actively traded as it was acquired by II-VI in 2016) for the third-worst opening gap down of any triple play. The only two reactions that were worse were the quarterly reports from Twitter (TWTR) in February of 2014 and ReachLocal (RLOC) in May of 2016 which fell 23.28% and 27.75%, respectively. For TWTR, that quarter also saw the single worst full-day decline for any triple play since 2001. Like ANAD, RLOC is no longer actively traded due to an acquisition by Gannet (GCI) just a few months after that quarter. RLOC, in particular, is interesting as the stock rallied 39.2% intraday to more than erase the losses from the opening gap. Granted, it is unlikely that BYND shareholders could see that kind of turnaround today, especially since RLOC was trading for under $2 at that time. Especially since some of these declines are also a factor of IPO investors exiting their positions. Today is the official lockup expiration date for BYND. Given the IPO price of $25, those investors are still notching a ~250% profit. Start a two-week free trial to Bespoke Institutional to access our interactive Earnings Explorer, 100 Most Recent Triple Plays, and much more.