Stock Dropped After Earnings: What History Says Happens Next
By Chad Hartman
Published · Last updated
AMC Entertainment's stock fell 74.3% in the month after it filed its August 2023 10-Q — not a headline exaggeration, the actual cumulative move from the filing date, pulled straight from GeminIQ's Earnings Market Reaction Heat Map. Two months later it was down 84.3%. Three months out, still 82.0%. Anyone holding AMC Entertainment that week had one real question, and it had nothing to do with the balance sheet: does this come back, or does it keep going?
Every financial media outlet has an opinion on that question. None of them have run the numbers across enough filings to answer it. This study does.
This study reads every 10-Q and 10-K in GeminIQ's as-filed database from 2009 through mid-2026 — 264,286 filings across 5,637 companies — bucketed into quintiles by each stock's cumulative return in the month after filing, then tracked forward. A 10-Q carries three months of post-filing data; a 10-K carries the full twelve. Every result below is measured against the universe base rate, never against zero, and every bucket clears at least 8,487 filings — never a handful of quarters standing in for a pattern.
The Pattern
Filings whose stock fell into the worst-reacting fifth in the first month were followed by continued underperformance at the median for a full year — not a rebound. Filings in the best-reacting fifth held onto their gains just as durably. Reversal is not the typical outcome at either end of the distribution. Persistence is.
But the average tells a softer story, and the gap between the two numbers is the real finding here. Across the 52,739 filings in the worst-reacting fifth, the median cumulative return sat at -16.7% one month after filing and was still -15.7% twelve months later, among the 11,065 annual filings with a full year of tracked data. Over that same stretch, the group's winsorized mean return climbed from -21.0% to -4.5% — a very different trajectory. A minority of large recoveries pulled the average most of the way back toward even while the typical filing in the group never moved. That gap is the whole story: whether a big drop looks like it "recovers" depends entirely on whether the question is about the average filing or the one sitting in your portfolio. This is a historical association across the sample window, not a forecast — the next filing that drops this hard could land anywhere in that range.
The Data
The pattern isn't a two-point comparison. It holds across every month tracked, in both directions.
One Month After Filing
| Quintile (by initial post-filing move) | N | Median Return | Winsorized Mean |
|---|---|---|---|
| Q1 — biggest drop | 52,739 | -16.7% | -21.0% |
| Q2 — moderate drop | 52,745 | -4.7% | -4.9% |
| Q3 — flat | 52,696 | 0.0% | 0.0% |
| Q4 — moderate gain | 52,712 | 4.1% | 4.3% |
| Q5 — biggest gain | 52,632 | 15.2% | 26.1% |
| Universe base rate | 263,524 | 0.0% | 0.3% |
Twelve Months After Filing (10-K filings only)
| Quintile (by initial post-filing move) | N | Median Return | Winsorized Mean |
|---|---|---|---|
| Q1 — biggest drop | 11,065 | -15.7% | -4.5% |
| Q2 — moderate drop | 9,492 | -0.8% | 3.3% |
| Q3 — flat | 9,354 | 4.5% | 12.7% |
| Q4 — moderate gain | 9,303 | 9.9% | 12.6% |
| Q5 — biggest gain | 8,487 | 17.3% | 42.0% |
| Universe base rate | 47,703 | 3.0% | 11.3% |
The month-by-month version of the same data is the chart below. The biggest-drop quintile's median line barely lifts off its opening level across all twelve months, while its mean line arcs back toward the base rate — the same divergence from the table, drawn out over time instead of compressed into two snapshots. The population shifts after month three, from the full 10-Q-plus-10-K pool to 10-K filings only, since a quarterly filing's tracked window ends there; that shows up as a small step in every line at that point, not a change in the underlying pattern.
The pattern holds up by company size too, with one wrinkle worth knowing before using it. Splitting the worst-reacting fifth into market-cap terciles, small-cap drops got worse at the median before they got better: -18.5% at one month, -24.7% at twelve months (n=3,900). Mid- and large-cap drops stabilized instead of deepening further — the large-cap median moved from -15.6% to -11.8% over the same span (n=2,902) — but neither group closed the gap to the universe base rate's +3.0% twelve-month median. Size didn't produce reversal anywhere in this dataset. It only changed how much further the typical filing drifted before it flattened out.
The Extremes
Averages hide the range, and the range is the entire story for anyone holding one specific stock instead of a basket of 52,739 of them. The last week of February 2020 is as clean a natural experiment as this dataset contains: a cluster of leisure and travel names filed their FY2019 10-Ks within four calendar days of each other, all landed in the worst-reacting fifth as COVID-era selling hit immediately after, and all fell more than 70% in the first month. A year later, they had split into two entirely different outcomes. (This period predates the three-year filing window GeminIQ's stock pages currently display by default; all the companies below remain live, and their 2020 filings sit on the full historical record, just not the default view.)
Caesars Entertainment's FY2019 10-K, filed February 28, 2020, fell -82.4% in the first month. By month six it had cut that loss to -26.1%. By month twelve it was +58.5% — a filing that started in the worst-reacting fifth and finished the year as a clear winner, against the backdrop of the William Hill acquisition and the broader reopening trade.
Norwegian Cruise Line filed its FY2019 10-K one day earlier, on February 27, 2020, and fell -74.9% in the same window. Six months out it was still down -59.7%. Twelve months out, -29.2% — a genuine recovery from the bottom, but nowhere close to even. Royal Caribbean, filed February 25, traced the same arc: -73.2% at one month, -18.9% at twelve.
Both companies absorbed the identical shock, filed inside the same four-day window, and started in the same quintile. One closed the year a winner. The other closed it still deeply underwater. Nothing about the initial drop told you which one you were looking at — that only showed up in what each company actually did afterward.
The Biggest Recoveries: Eleven Drops That Came Back
The median says a big drop usually stays down. The mean says some come back hard, and these are the ones that did: the eleven largest round-trips in the worst-reacting fifth of all 264,286 filings, ranked by the gain that followed the first-month drop. They came back for eleven different reasons (a debt refinancing, a pandemic reopening trade, a meme-stock revival, a lending freeze easing, a first profitable quarter), and Carvana's is the one a reader could most plausibly have seen coming from the filing itself.
| Rank | Company | Filing | Initial Drop | Recovery Window | Return |
|---|---|---|---|---|---|
| 1 | Wayfair | FY2019 10-K | -56.9% | 12 months | +374.5% |
| 2 | Carvana | FY2022 10-K | -24.1% | 12 months | +345.6% |
| 3 | Etsy | FY2019 10-K | -45.3% | 12 months | +268.8% |
| 4 | Roku | FY2019 10-K | -23.7% | 12 months | +239.3% |
| 5 | Five Below | FY2025 10-K | -20.6% | 12 months | +170.6% |
| 6 | SoFi | FY2023 10-K | -20.2% | 12 months | +95.9% |
| 7 | MongoDB | FY2025 10-K | -15.7% | 12 months | +91.3% |
| 8 | GameStop | FY2024 10-K | -32.8% | 12 months | +70.5% |
| 9 | Upstart | FY2022 10-K | -18.1% | 12 months | +68.8% |
| 10 | Teladoc | FY2015 10-K | -22.0% | 12 months | +61.2% |
| 11 | Datadog | FY2022 10-K | -10.5% | 12 months | +70.0% |
Three of the eleven — Wayfair, Etsy, and Roku, ranked first, third, and fourth — share a filing date that has nothing to do with any single company. All three filed FY2019 annual reports in the last week of February or the first days of March 2020, days before a pandemic crashed and then reflated the entire market. Standard financial media would tell each of those stories separately, as if three companies independently overreacted to their own numbers. The filing dates say otherwise. The other eight names on the list — including four of the five covered in detail below — are not tied to that week; whatever drove each of them, it wasn't a shared calendar.
These eleven are the extreme right tail of a bucket whose typical member did not recover. They are what pulls the group's mean back toward even while its median stays at -15.7%.
Wayfair: A Pandemic Rewrote the Filing
Wayfair's FY2019 10-K, filed February 28, 2020, reported $9.127 Billion in trailing revenue, up 34.6% year over year — a growth rate media coverage at the time treated as unremarkable for an e-commerce name still years from profitability. The net loss told a worse story: -$984.6 Million trailing twelve-month, worse than the prior year's -$504.1 Million, with diluted losses of $10.68 per share. Total debt had roughly doubled in a single year, from $738.9 Million to $1.456 Billion, pushing the company into a net-debt position of $873.4 Million for the first time in the dataset. On the numbers alone, this was a filing that should have kept falling.
It fell 56.9% in the first month — the steepest single-month drop of any filing in this study. Then COVID-19 turned e-commerce delivered-to-your-door furniture into one of the most in-demand categories in retail, and Wayfair's stock rose 374.5% over the next twelve months. Nothing in the 10-K itself explains that outcome. The filing described a company burning cash faster every year; the market's verdict came from an external event the filing could not have anticipated.
Carvana: $8.3 Billion in Debt and a 346% Comeback
Carvana's FY2022 10-K, filed February 23, 2023, is the cleanest debt-crisis story in the dataset. Revenue growth had decelerated from 123.9% year over year in Q3 2021 to just 6.2% by the panic quarter, and gross margin compressed from 15.1% to 9.2% over the same stretch — a business that had scaled aggressively on the assumption growth would keep funding itself. GeminIQ's pre-calculated Total Debt shows the balance sheet growing from $5.413 Billion to $8.309 Billion over the year leading into the filing, largely the financing behind the ADESA acquisition. Net Debt stood at $7.681 Billion against just $628 Million in cash, and the company posted a trailing net loss of -$1.587 Billion.
That combination — decelerating growth, compressing margins, and a debt load that had grown sharply at the worst possible moment — is exactly the setup a distressed-debt short thesis is built on, and the stock dropped 24.1% in the following month. What followed was one of the more written-about corporate turnarounds of the period: a debt exchange that cut leverage, a return to unit-economics discipline, and a stock that gained 345.6% over the next twelve months, the second-largest twelve-month reversal in this entire study.
SoFi: The Quarter It Finally Turned a Profit
The number that made SoFi's FY2023 10-K worth a rally never made it into the trailing headline. Filed February 27, 2024, the filing still reported a trailing twelve-month net loss of -$300.7 Million on revenue growth of 34.9% year over year — solid, but not obviously different from prior quarters that hadn't triggered anything. Buried inside it: the fourth quarter itself posted $47.9 Million in net income, the company's first quarter of GAAP profitability since going public. The trailing figure still showed red because it carried three losing quarters with it.
The stock dropped 20.2% in the month after the filing regardless — a trailing-loss headline is a trailing-loss headline, whatever quarter produced it. Over the following twelve months, as the profitable quarter proved not to be a one-off, the stock gained 95.9%. This is closer to a normal "the filing undersold its own good news" story than a Carvana-style crisis reversal — a case where the trailing metric and the forward-looking signal briefly pointed in opposite directions.
GameStop: The Filing Didn't Move It
The filing explains the drop. It does not explain the recovery. GameStop's FY2024 10-K, filed March 26, 2024, reported trailing revenue of $5.273 Billion, down 11.0% year over year — a real, ongoing sales decline. The one bright spot was a swing to $6.7 Million in trailing net income, up from the prior year's -$313.1 Million loss, sitting on $938.9 Million in cash against just $28.5 Million in debt. That combination — shrinking sales, barely-positive earnings, an unusually clean balance sheet — dropped the stock 32.8% in the following month, a reasonable market reaction to a company still losing its core business even as it stopped bleeding cash.
The 70.5% twelve-month gain that followed has almost nothing to do with any of that. On May 12, 2024 — roughly six weeks after the filing — Keith Gill, the investor known as "Roaring Kitty" who had driven GameStop's 2021 short squeeze, returned to social media for the first time since 2021. Shares gained over 100% intraday on no company news whatsoever. This is the cleanest illustration in the entire study of why every finding here is stated as association, not prediction.
Upstart: Flat on Paper, Cut in Half in Practice
Upstart's FY2022 10-K, filed February 16, 2023, reported trailing revenue of $842.4 Million, down just 0.7% year over year — a headline that looks almost unremarkable next to the other filings on this list. The quarterly trend underneath it did not: revenue fell sequentially every quarter of the year, from $314.0 Million in Q1 to $258.3 Million, $157.2 Million, and finally $112.9 Million in Q4 — a top line cut by more than half in nine months as rising rates froze the loan-funding markets Upstart's AI-lending model depended on. Net income swung from $58.9 Million in Q4 2021 to a -$55.3 Million loss in Q4 2022, and GeminIQ's pre-calculated Stock-Based Compensation to Revenue shows dilution accelerating in the opposite direction of the business, from 8.6% of revenue a year earlier to 15.0% by the panic quarter.
The stock dropped 18.1% the following month and gained 68.8% over the next twelve, as rate expectations eased and the lending-freeze thesis that had driven the sell-off started to reverse. The full-year revenue figure alone would have missed the entire story in both directions — flat on paper, collapsing and then stabilizing underneath.
The Method
None of this holds up unless the math behind it does. Every number above follows the same rules as every other filing data study on this site: post-filing return columns are cumulative and never compounded, every bucket is measured against the universe base rate rather than zero, and no bucket below roughly 200 filings gets a conclusion drawn from it — the tightest quintile cited here still clears 8,487. The full rule set, including exactly how the twelve-month 10-K window and three-month 10-Q window combine without double-counting, lives in the Filing Data Study Methodology post.
Check Your Holdings
The method behind this study runs on any single stock in about two minutes, and it's worth running before reacting to a red print. Open a holding's page on GeminIQ and pull up the Earnings Market Reaction Heat Map — the same cumulative-return-from-filing-date figure used to build every bucket above. Find its most recent filing's one-month cumulative move. A drop of -15% to -20% or worse puts it in territory where, historically, the typical filing was still down double digits a full year later — not a rebound story, whatever the headline says that week.
Before assuming this one is different, pull its Financial Statements and check whether Return On Invested Capital and Revenue Growth actually deteriorated alongside the price, or whether the underlying filing looks essentially unchanged and the move was purely a reaction. That distinction is the difference between a Caesars Entertainment and a Norwegian Cruise Line, and it's sitting in the filing, not in the stock chart. The same check separates the recoveries above: Carvana's and Upstart's rebounds traced back to numbers inside their filings, while Wayfair's and GameStop's did not. Cross-reference Total Debt and Net Debt against the prior quarter too. A leverage ratio that doubled in two quarters is a different risk from one holding flat. None of this forecasts which way a drop resolves; it tells you whether the sell-off and the filing were describing the same problem.
Frequently Asked Questions
Do stocks recover after a big drop on earnings?
Usually not, at the median. Across 52,739 filings in the worst-reacting fifth since 2009, the median return was -16.7% one month after filing and still -15.7% twelve months later. The group's average recovered to -4.5%, but only because a minority of large rebounds pulled it up.
What were the biggest recoveries after an earnings drop?
Wayfair's FY2019 10-K fell 56.9% in its first month and then gained 374.5% over twelve, the largest round-trip in the dataset. Carvana's FY2022 10-K fell 24.1% and gained 345.6%, and Etsy and Roku, both FY2019 10-Ks filed just before the pandemic, gained 268.8% and 239.3%.
Do small-cap stocks recover differently from large caps after a drop?
Small caps did worse. Their median fell from -18.5% at one month to -24.7% at twelve, while large caps improved from -15.6% to -11.8%. Neither group caught up with the universe's +3.0% twelve-month median.
Wall Street's data. Main Street's price.
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All figures are drawn from each company's as-filed 10-K and 10-Q filings, publicly available on SEC EDGAR. Post-filing market reaction is measured from each filing's filed date, cumulative through each tracked month and never compounded. Sample: 264,286 filings across 5,637 companies, 2009–2026, quintiled by each filing's one-month cumulative post-filing return. Methodology: Filing Data Study Methodology.
Disclaimer: The content in this blog is for educational and entertainment purposes only and does not constitute financial, legal, or tax advice. Investing involves risk, including the loss of principal. The post-filing return patterns discussed in this article represent historical observations over the sample window and do not constitute predictions of future stock price movements for any individual stock. The views expressed are my own and not intended as financial advice or a guarantee of future performance.