How Will TransDigm Stock React To Its Upcoming Earnings?
TransDigm (NYSE:TDG) is set to report its earnings on Tuesday, May 5, 2026. The company has $67 Bil in current market capitalization. Revenue over the last twelve months was $9.1 Bil, and it was operationally profitable with $4.3 Bil in operating profits and net income of $2.0 Bil. 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 earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released.
See earnings reaction history of all stocks
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TransDigm’s Historical Odds Of Positive Post-Earnings Return
Some observations on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the last five years, with 10 positive and 10 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 50% of the time.
- However, this percentage decreases to 42% if we consider data for the last 3 years instead of 5.
- Median of the 10 positive returns = 2.7%, and median of the 10 negative returns = -3.1%
Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D | 5D | 21D |
| 2/3/2026 | -9.3% | -9.4% | -8.4% |
| 11/12/2025 | 1.1% | 4.4% | 0.1% |
| 8/5/2025 | -11.9% | -12.4% | -15.1% |
| 5/6/2025 | -5.5% | -3.8% | -1.6% |
| 2/4/2025 | -3.3% | -1.3% | 1.6% |
| 11/7/2024 | -3.8% | -1.4% | -7.5% |
| 8/6/2024 | 2.3% | 2.0% | 11.7% |
| 5/7/2024 | 0.7% | -1.6% | 4.7% |
| 2/8/2024 | -1.6% | 0.0% | 1.6% |
| 11/9/2023 | 8.7% | 11.1% | 14.0% |
| 8/8/2023 | -2.8% | -5.4% | -3.4% |
| 5/9/2023 | 4.7% | 4.6% | 4.3% |
| 2/7/2023 | 3.1% | 2.8% | 6.1% |
| 11/10/2022 | 9.8% | 5.1% | 4.6% |
| 8/9/2022 | 0.4% | 5.6% | -1.4% |
| 5/10/2022 | 3.8% | 0.1% | 13.0% |
| 2/8/2022 | 2.0% | -0.4% | 0.1% |
| 11/16/2021 | -1.0% | -3.7% | -10.9% |
| 8/10/2021 | -1.2% | -3.9% | -6.9% |
| 5/11/2021 | -0.2% | -0.8% | 10.4% |
| SUMMARY STATS | |||
| # Positive | 10 | 9 | 12 |
| # Negative | 10 | 11 | 8 |
| Median Positive | 2.7% | 4.4% | 4.6% |
| Median Negative | -3.1% | -3.7% | -7.2% |
| Max Positive | 9.8% | 11.1% | 14.0% |
| Max Negative | -11.9% | -12.4% | -15.1% |
Correlation Between 1D, 5D and 21D Historical Returns
A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
| History | 1D_5D | 1D_21D | 5D_21D |
|---|---|---|---|
| 5Y History | -12.6% | 20.9% | 0.8% |
| 3Y History | 9.4% | 52.6% | 28.6% |
Is There Any Correlation With Peer Earnings?
Sometimes, peer performance can have an influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of TransDigm stock compared with the stock performance of peers that reported earnings just before TransDigm. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
| 1D Return | Peer Post-Earnings 1D Return | ||||
|---|---|---|---|---|---|
| TDG Earnings Dates | TDG | RTX | PH | HON | WWD |
| 2/3/2026 | -9.3% | 1.1% | 1.7% | 1.6% | 13.4% |
| 11/12/2025 | 1.1% | 2.7% | 2.6% | -3.1% | N/A* |
| 8/5/2025 | -11.9% | 4.8% | N/A* | -1.5% | -2.1% |
| 5/6/2025 | -5.5% | 12.7% | 0.6% | -0.7% | 8.1% |
| 2/4/2025 | -3.3% | 0.0% | -2.0% | N/A* | -1.8% |
| 11/7/2024 | -3.8% | -4.3% | 8.8% | 4.0% | N/A* |
| 8/6/2024 | 2.3% | 0.8% | N/A* | -7.3% | -16.0% |
| 5/7/2024 | 0.7% | 1.8% | 3.7% | 2.0% | 16.8% |
| 2/8/2024 | -1.6% | 1.7% | 3.4% | N/A* | -3.5% |
| 11/9/2023 | 8.7% | 5.2% | 2.0% | N/A* | N/A* |
| 8/8/2023 | -2.8% | -1.0% | 1.7% | -4.5% | 6.0% |
| 5/9/2023 | 4.7% | -4.8% | 5.2% | -0.7% | 10.6% |
| 2/7/2023 | 3.1% | -1.6% | 3.4% | -0.9% | -4.7% |
| 11/10/2022 | 9.8% | 10.7% | 6.5% | 10.4% | N/A* |
| 8/9/2022 | 0.4% | 1.9% | -1.3% | 1.9% | -6.4% |
| 5/10/2022 | 3.8% | -7.6% | -3.8% | 0.7% | -11.4% |
| 2/8/2022 | 2.0% | 5.3% | -2.2% | 1.5% | 4.3% |
| 11/16/2021 | -1.0% | -0.3% | 2.4% | 2.3% | N/A* |
| 8/10/2021 | -1.2% | -0.6% | -0.5% | 1.1% | -7.1% |
| 5/11/2021 | -0.2% | N/A* | N/A* | N/A* | 0.2% |
| CORRELATION | 14.5% | 8.3% | 35.3% | -30.5% | |
* N/A indicates that the peer reported earnings after TDG
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