SoFi Technologies (NASDAQ:SOFI) is set to publish its earnings report on Tuesday, April 29, 2025. Data from the past five years shows that SoFi stock has experienced positive one-day returns following earnings releases in 67% of cases. These positive returns have a median of 8.9% and a peak of 28.4%. These statistics underscore the considerable volatility often associated with SoFi’s stock price during its earnings announcements.
For traders focused on event-driven strategies, comprehending SoFi’s historical stock behavior following earnings announcements can be beneficial. Although the immediate market response will rely on how the actual results and future forecasts align with consensus estimates and investor expectations, evaluating historical trends presents potential trading strategies:
- Pre-Earnings Strategy: By recognizing the historical probability of positive one-day returns and the potential scale of those returns, traders can position themselves strategically before the earnings announcement.
- Post-Earnings Trading: Analyzing the relationship between the initial stock response and medium-term returns post-earnings can guide trading choices made after the announcement.
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Historical Odds of Positive Post-Earnings Returns for SoFi Technologies
Here are some insights regarding one-day (1D) post-earnings returns:
- Over the past five years, there have been 15 recorded earnings data points, with 10 positive and 5 negative one-day (1D) returns observed. In summary, positive 1D returns were recorded approximately 67% of the time.
- This percentage remains constant at 67% if we examine data for the last 3 years instead of 5.
- The median of the 10 positive returns stands at 8.9%, while the median for the 5 negative returns is -10%
Further data for observed 5-Day (5D) and 21-Day (21D) returns following earnings is summarized along with the statistics in the table below.
Relationship Between 1D, 5D, and 21D Historical Returns
A strategy that involves relatively less risk (though it may not be advantageous if the correlation is weak) is to analyze the correlation between short-term and medium-term returns post-earnings, identify a pair that demonstrates the highest correlation, and perform the necessary trade. For instance, if 1D and 5D exhibit the strongest correlation, a trader may take a “long” position for the following 5 days if the 1D post-earnings return is positive. Here is some correlation data derived from 5-year and 3-year (more recent) history. Please note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
Occasionally, the performance of peers might impact post-earnings stock reactions. Indeed, the pricing-in might commence prior to the earnings announcements. Below is some historical data concerning the post-earnings performance of SoFi Technologies stock compared to the stock performance of peers that reported earnings immediately before SoFi Technologies. For a fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
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