Click to view the earnings moves in VIRC
Virco’s Stock Sinks 9.1% on Earnings Miss—How Unusual Is This Move?
Shares of Virco Mfg. (VIRC) took a sharp 9.1% hit today following a disappointing quarterly report, far exceeding what the options market was expecting. But just how extraordinary is today’s drop in the context of Virco’s history?
Latest Earnings: Challenging Quarter as School Funding Slows
The company reported a net loss of $1.3 million in the third quarter on sales of $47.6 million, with revenues for the first nine months down 27% compared to the prior year. The market’s response was swift and negative, driving VIRC down to $6.01—a move nearly twice the magnitude of the ±8.4% swing the options market was pricing in.
The culprit: fading pandemic-era stimulus and a generally cautious mood among Virco’s core customers in the educational furniture sector. While management notes some early signs of stabilization in backlogs, today’s headline-grabbing loss points to near-term challenges.
How Does This Drop Compare to VIRC’s Typical Earnings Reaction?
Despite today’s 9.1% loss, history shows VIRC stock usually has a bullish tilt on earnings day. On average, over the last 12 quarters, shares moved +3.1% with gains outnumbering losses two to one. Interestingly, the stock also tends to climb from the open to close, with an average move of +3.4% and 75% of the time ending higher than the open. Today, however, breaks from that pattern.
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Average Return | +3.1% | -0.5% | +8.4% | -3.4% | +3.4% |
| % of Moves Up | 66.7% | 41.7% | 75.0% | ||
| % of Moves Down | 33.3% | 58.3% | 16.7% |
Source: Historical VIRC Earnings Stock Performance
How Big Are the Swings—And Was Today Out of the Ordinary?
The numbers show VIRC is a volatile name around earnings, with an average absolute earnings move of 11.1% and a max swing reaching 21.5%. So, while today’s 9.1% loss is eye-catching, it’s not unheard of for this stock—especially when earnings disappoint or the outlook darkens.
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Absolute Average Return | 11.1% | 6.1% | 8.4% | 3.4% | 6.0% |
| Max Absolute Return | 21.5% | 18.3% | 19.1% | 13.1% | 16.8% |
| Min Absolute Return | 1.7% | 0.1% | 0.0% | 0.0% | 0.0% |
What About After Earnings—Does the Stock Tend to Bounce?
Data shows VIRC has historically drifted higher after its initial earnings-day move, posting average gains of +1.9% the day after, with the upward bias gradually fading over two weeks. In other words, some buyers often step in after big drops—but the odds tilt lower as time goes on.
| Stock Performance | 1 Day After Earnings | 2 Days After Earnings | 3 Days After Earnings | 1 Week After Earnings | 2 Weeks After Earnings |
|---|---|---|---|---|---|
| Average Return | +1.9% | +2.4% | +3.4% | +4.8% | +2.7% |
| % of Moves Up | 63.6% | 63.6% | 45.5% | 36.4% | 36.4% |
| % of Moves Down | 36.4% | 36.4% | 54.5% | 63.6% | 63.6% |
The Bottom Line: Keep History in Mind
While today’s sharp loss is unsettling for investors, the data shows VIRC often surprises on earnings day—both up and down. Historically, positive earnings reactions outnumber negatives, but volatility is high, and outsized moves like today are not out of character. For a deeper dive into these trends and more detailed statistics, check out the historical stock performance page for VIRC.
As Virco’s management notes, the post-pandemic educational landscape remains uncertain, but periods of underperformance have been followed by rebounds in the past. Traders and investors will be watching to see if the coming quarters mimic the catch-up pattern observed after previous disruptions.
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