Market Tumbles as Earnings Outlook and Sentiment Shift

Market Tumbles: Stock indexes dropped significantly as consumer sentiment hit a 7-month low and inflation expectations jumped. The mixed corporate earnings reports revealed weaker forecasts from major companies.

Date: 08-02-2025

AI Rating: 5

Earnings Per Share (EPS): The report highlights earnings results of various companies that could impact stock prices. Notably, Elf Beauty reported adjusted EPS of 74 cents, which was below the consensus estimate of 77 cents, leading to a significant drop in its stock price. Furthermore, its revised full-year adjusted EPS forecast of $3.27-$3.32 also fell short of the consensus of $3.61.

Revenue Growth: Companies like Amazon.com, Microchip Technology, and Homebuilding stocks (Toll Brothers, DR Horton) all faced declines due to below-consensus revenue growth forecasts. However, Expedia Group and Take-Two Interactive showed strong revenue growth results, leading to significant gains in their stock prices.

Net Income: Though net income is not directly mentioned, the outlooks for companies like Microchip Technology indicate challenges in net sales, suggesting potential impacts on net income figures. This could contribute to pressure on stock prices for companies that do not meet market expectations.

Profit Margins (Gross, Operating, Net): Profit margins are not explicitly discussed in the report. However, the variance in companies meeting forecasts could imply differences in their profit margins, which could be reflected in their stock performance.

Free Cash Flow (FCF): While free cash flow is not covered in this report, companies forecasting earnings that miss expectations, such as BILL Holdings, could face cash flow issues, which might further impact their stock prices.

Return on Equity (ROE): ROE is also not discussed in this report, but potential declines in EPS and revenue growth may infer challenges for companies in maintaining attractive ROE, affecting stock investor perceptions.

Stocks: AMZN EXPE TTWO ELF TOL DHI MCHP NKE SKX APD