Stocks from Palantir to Snap could see big swings on earnings this week

This week's earnings reports are anticipated to generate significant stock volatility, with options trading indicating potential outsized price movements for key companies. Palantir (PLTR) is projected for an 8.9% swing after its Monday earnings, with analysts expecting $1.09 billion in revenue and $0.17 EPS, following a substantial 400% stock surge over the past year and a recent $10 billion U.S. Army contract. Snap (SNAP) could experience a 13.8% move post-earnings on Wednesday, with estimates of $1.49 billion revenue and $0.12 EPS, against a backdrop of a 38% stock decline over the last 12 months attributed to user attrition and heightened competition.

Analysis

This earnings season has demonstrated robust momentum, with over 80% of companies surpassing Q3 revenue or EPS forecasts, according to FactSet data. However, the upcoming week is poised for significant volatility among Big Tech, retail, and pharmaceutical firms, with options trading signaling substantial potential price movements. These anticipated moves are quantified by taking 85% of an at-the-money straddle's total premium.

Palantir (PLTR) is projected for an 8.9% stock movement following its Monday earnings report. Analysts estimate Q3 revenue at $1.09 billion and EPS at $0.17. The company's stock has experienced a remarkable 400% surge over the past year, significantly bolstered by a recent $10 billion, 10-year contract with the U.S. Army.

Snap (SNAP) faces an even larger potential 13.8% move after its Wednesday earnings release. Wall Street anticipates Q3 revenue of $1.49 billion and EPS of $0.12. This outlook is set against a challenging backdrop of a 38% stock decline over the last 12 months, primarily attributed to decreasing user numbers and intense competition from rivals like Meta Platforms.

Key Decisions for Investors

• Investors should prepare for significant post-earnings volatility in both PLTR and SNAP, as indicated by options markets.
• Consider PLTR's strong growth and government contract momentum against its substantial recent appreciation, suggesting potential for profit-taking or continued upside if estimates are significantly beaten.
• For SNAP, closely monitor user growth metrics and competitive commentary, as continued attrition could exacerbate its existing 38% 12-month decline, regardless of short-term EPS beats.