Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether itβs a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 π
*Click the image to enlarge it
Tuesday, we heard from the $8B French fry producer, Lamb Weston $LW, which beat its headline expectations and had a +1.30 reaction score.
The company posted revenues of $1.66B, versus the expected $1.62B, and earnings per share of $0.74, versus the expected $0.54.
We also received an update from the human resources software provider, Paychex $PAYX. They posted a double beat, but the market responded with a -1.44 reaction score.
Their revenues met the market's expectations, and earnings per share exceeded expectations by two cents.
Now let's dive into the fundamentals and technicals π
LW had its third consecutive positive earnings reaction π₯
Lamb Weston had a +4.3% post-earnings reaction, and here's what happened:
Despite 6% year-over-year growth in sales, prices fell 7% over the same period.
Potato costs in the U.S. are expected to decline by mid-single digits over the next year, which should help boost the company's margins.
The management team reaffirmed its forward guidance for the next fiscal year.
So far in 2025, this company has beaten its headline expectations in every quarter and been rewarded for it. However, we haven't seen follow-through on the upside in the days after.
Each time, the price has found resistance and turned lower. This has shaped into a textbook bearish-to-bullish reversal pattern.
With the market consistently rewarding this stock for its fundamentals, we think the technicals will eventually confirm with a breakout to new year-to-date highs.
So long as LW is below 61, the path of least resistance is sideways for the foreseeable future. A decisive close above that level would mark the beginning of a brand-new primary uptrend.
PAYX failed to rally on good news π»
Paychex had a -1.4% post-earnings reaction, and here's what happened:
Revenue increased 17% year-over-year, driven by 21% growth in the management solutions segment over the same period.
The recent acquisition of Paycor for $4.2B is going well and is expected to help fuel future growth for the company.
In addition to the strong quarter, the management team raised its forward earnings guidance.
Despite the good earnings report, Mr. Market punished shareholders after the data was released. It was a classic beat / beat / drop.
Intraday, the price cratered 7%, but the buyers stepped in and reversed the trend. They continued buying until the end of the session, closing at the day's high.
Since the all-time high earlier this year, the stock has suffered a drawdown of over 20%. While a retest of last year's lows is possible, we think the price is likely close to a bottom.
With the fundamentals and technicals still firmly in a bearish regime, this isn't a stock we want to touch until the bulls carve out some type of reversal pattern.
We expect PAYX to be rangebound between 115 and 135 for the foreseeable future. It's a hot mess.
Thank you for reading
-The Beat Team
P.S. Small-cap season is here - Steve Strazza and Patrick Dunuwila went LIVE to talk about which stocks they're buying and why.
