How Might Moderna Stock React To Upcoming Earnings?

Moderna (NASDAQ:MRNA) is set to report its earnings on 14th Feb 2025. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader. There are two ways to do that – understand the historical odds and position yourself prior to the event, or look at the correlation between immediate return and medium-term return post earnings and position yourself accordingly post-event.

Moderna’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post earnings returns:

• In the past 5 years, 26 earnings data points recorded, with 15 positive and 11 negative one-day (1D) returns observed. In summary, positive 1D returns seen about 58% of the times.
• However, this percentage has decreased to 50% if we consider last 3 year data instead of 5.
• Median of the 15 positive returns = 6.9%, and median of the 11 negative returns =-8.4%

Additional data for observed returns 5-days (5D), and 30-days (30D) post earnings are summarized along with the statistics, in the table below.

Correlation Between 1D, 5D and 30D Historical Returns

A relatively less risky strategy (though not useful if correlation is low) is to understand correlation between short-term and medium-term returns post earnings, find a pair that has highest correlation and execute appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 4 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to correlation between 1D post-earnings returns and subsequent 5D returns.

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have influence on post-earnings stock-reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on past post-earnings performance of Moderna stock compared with stock performance of peers that reported earnings just prior to Moderna. For fair comparison, peer stock returns also represent post-earnings one day (1D) return.

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