What students analyze
Students compare their estimates of adjusted earnings per share and revenue with the consensus figures, then consider how the share price might react. The two related markets let the class discuss why a company can beat an estimate without producing the price move some students expected.
Before trading, the moderator chooses the company ticker and the percentage band for the price-reaction question. Questions, outcomes, settlement rules and research sources can all be edited in the Moderator application.
Market 1: Earnings versus consensus
At the next earnings announcement, will {TICKER} beat consensus adjusted EPS and revenue?
- Beats both consensus adjusted EPS and revenue
- Beats consensus adjusted EPS only
- Beats consensus revenue only
- Beats neither consensus adjusted EPS nor revenue
Settlement: Compare the initially published adjusted EPS and revenue with the corresponding consensus estimates cited in the earnings report. A figure must be strictly greater than its estimate to count as a beat.
Market 2: Share-price reaction
How will {TICKER} shares react on the first trading day after the earnings announcement?
- Positive price reaction above +{BAND}%
- Within −{BAND}% to +{BAND}%, inclusive
- Negative price reaction below −{BAND}%
Settlement: Compare the last regular-session close before the announcement with the first regular-session close after it. Both exact band boundaries belong to the middle outcome; after-hours quotes and adjusted closes are not used.
Using it in class
Students can examine filings, earnings expectations and other evidence before forming a view. During trading, their bids and offers create prices that others can compare with their own analysis. Time-stamped notes can record why a student traded or changed position. After the announcement, the class can discuss both the results and whether the price reaction matched its expectations.
Research and settlement sources
The prepared case points to Yahoo Finance’s earnings summary, analysis and historical-price pages for the chosen ticker. Review the exact source and settlement wording in the case CSV before opening trading.