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REDDIT

Why do stocks sometimes drop after beating earnings and raising guidance?

S
Feb 28, 2026 · 16:07

I’m trying to better understand post-earnings price action. Occasionally a company beats EPS and revenue expectations and even raises forward guidance, yet the stock still sells off.

Is this typically due to positioning and expectations being even higher than consensus? Or are investors reacting more to forward commentary, margins, or qualitative guidance than the headline numbers?