Should You Buy Target After Its Stock Crashes 35%?

In recent months, it hasn't been unusual to see a company's stock fall dramatically after an earnings release. Wall Street seems to be giving no margin for error -- and even an average quarterly report could result in a precipitous drop in share price. Unfortunately for retail giant Target (NYSE: TGT), its Q1 2022 report contained some bad news and the stock plummeted almost 25% the next day and currently trades 35% lower than its pre-earnings price.

Leading up to this report, Target had actually been doing quite well. At the market close on May 17 -- a day before the earnings release -- its shares were only down 7% on the year. I say "only" because the S&P 500 was off 14% over the same time frame. So is Target really 35% worse of a business now than on May 17? Let's take a closer look to see.

One of the headlines coming out of Target's Q1 2022 earnings report was that the company missed the consensus analyst estimates for earnings. Target reported earnings per share (EPS) of $2.19 when $3.07 was expected. To be fair, Target's management stated when it reported Q4 2021 results that year-over-year profit performance for 2022 would be variable and generally improve over the year. So a miss on earnings in Q1 doesn't necessarily portend doom for the remainder of the year, even if the market reacted harshly.

Source Fool.com