5 Earnings Losers With More Downside Ahead

It’s been a generally successful earnings season for most of the market, as EPS figures remain strong and analysts continue to raise estimates.

But not everyone is joining the party.

Earnings reports from the following five companies appeared to be strong at first, but all five stocks dropped after reporting.

In fact, all posted numbers above the estimates for either earnings per share (EPS) or revenue.

However, it wasn’t the print that sent these stocks plummeting; it was the guide.

And digging deeper into the numbers reveals a particular pain point in each reporting company’s guidance.

Today, we’ll look at five earnings season losers and use the Edge Momentum Score to explain why their stocks likely have more downside ahead.

Here are the five biggest earnings losers to sell now.

Reddit Inc.

Edge Momentum Score: 24.16 Social media platform Reddit (NYSE: RDDT ) released its Q2 2026 results on July 30 and smashed both the bottom and top lines.

Revenue grew more than 60% year-over-year (YoY) for the eighth consecutive quarter, and guided $860 million in Q3 revenue, which would bring the streak to nine.

But the stock dropped more than 20% on the release, and U.S. user growth is the red flag waving.

Active U.S.

Reddit users are the most lucrative batch of clients the company reaches, and this is where growth has stagnated.

Daily active unique U.S. users (DAUq) declined to 53.2 million from 53.5 million, and the number of logged-in U.S. users (i.e., the ones posting and clicking on ads) hasn’t grown in five straight quarters.

Stagnating user growth means Reddit needs to extract more and more cash from each user to maintain its revenue expansion, and the market has now drastically repriced that business model.

RDDT shares had been leaning on the 50-day moving average for support, but that level was broken following the Q2 2026 earnings release.

The stock now trades below both key moving averages, with the Relative Strength Index (RSI) below 50 and the Moving Average Convergence Divergence (MACD) line dipping below the histogram.

These signals hint that more downside likely remains in RDDT shares.

Papa John’s International Inc.

Edge Momentum Score: 4.30 The worst Q2 2026 report of our selections came from Papa John’s (NASDAQ: PZZA ) on August 6th, which narrowly beat EPS and revenue estimates.

But these narrow beats came from a very low base.

Total revenue fell more than 8% YoY, and North American comp sales dropped 8.3%, more than offsetting the 1.5% YoY gain in international comps.

Full-year 2026 revenue and EPS guidance were cut, and the company suspended its dividend heading into Q3.

This three-pronged disaster sent the stock down nearly 18% in a single session, and the decline has only gotten worse since.

The 50-day SMA’s strong resistance was a warning sign heading into earnings, and the poor report has sent shares lower than the Earth’s crust.

The RSI and MACD have reached severe oversold territory, suggesting a short-term bounce is ahead.

But the fundamentals for Papa John’s are rapidly deteriorating, and analysts have been quick to cut price targets on the beleaguered pizza chain.

AppLovin Corp.

Edge Momentum Score: 7.04 AppLovin (NASDAQ: APP ) hasn’t made many appearances in the losers’ circle lately, but its Q2 2026 report is where valuation finally caught up to the software startup.

Despite YoY growth of over 52%, the company reported its first revenue miss since Q1 2025.

GAAP EPS came in ahead of estimates, but adjusted EBITDA also missed due to weaker-than-expected margins.

A small miss can still be massive for a company with a stock trading at 20 times sales, and APP shares received a 20% haircut in the sessions following the release.

13 different firms cut price targets following the release, and Wells Fargo and Piper Sandler both downgraded the stock from Buy to Neutral.

The trend is no longer your friend on the APP chart.

Support at the 50-day SMA had been surrendered weeks ago, and the downturn is intensifying.