Post-earnings sell-offs hit $ROOT, $DAVE, $TTD, $UPST stocks in August 2025 — top rebound opportunities identified

Post-earnings sell-offs in the equity markets often expose temporary dislocations between a company’s fundamental performance and its stock price, creating ripe opportunities for discerning investors. In the midst of the Q3 2025 reporting season, several high-growth names across fintech, digital advertising, and consumer sectors have seen sharp declines despite mixed but often positive earnings surprises, prompting a closer look at whether these dips signal undervaluation or deeper concerns.

Navigating the Earnings Volatility Landscape

As of 9 August 2025, the broader market has grappled with heightened volatility, influenced by macroeconomic pressures including interest rate uncertainty and geopolitical tensions. According to Morningstar’s Q3 2025 Stock Market Outlook, elevated valuations across many sectors have amplified reactions to earnings reports, with investors quick to punish any hint of deceleration. This environment has led to pronounced sell-offs in stocks like those in digital platforms and innovative consumer brands, where even beats on revenue and EPS can be overshadowed by cautious guidance.

Historical patterns suggest these post-earnings drops can be overreactions. For instance, data from Nasdaq’s earnings reports database indicates that in the past five quarters, approximately 40% of stocks experiencing a 10% or greater intraday decline post-earnings have recovered at least half of the loss within 30 days, particularly when fundamentals remain intact. This backdrop sets the stage for evaluating specific cases where recent sell-offs might present asymmetric upside.

Fintech Innovators Under Pressure

Root Inc. (ROOT)

Root, a player in usage-based auto insurance, reported Q2 2025 earnings on 6 August, surpassing analyst expectations with EPS of $0.44 against forecasts of $0.44, and revenue of $348.36 million. Despite the beat, shares closed at $88.26 on 9 August, down 2.18% from the previous close, reflecting a broader 31.03% decline over the past 50 days. With a forward P/E of -49.31 indicating market scepticism on profitability, the stock trades at a price-to-book of 5.56, above its 200-day average of $112.40 but well below its 52-week high of $181.14.

Analysts, including those at Investing.com, noted in earnings call transcripts that the beat stemmed partly from non-cash items, raising questions about sustainability amid credit market risks. However, Root’s trailing EPS of 5.14 and current-year estimate of 1.66 suggest improving margins. Charles Schwab’s Monthly Stock Sector Outlook for July 2025 highlights financials as undervalued relative to tech, positioning ROOT as a potential rebound candidate if auto insurance demand stabilises.

Upstart Holdings (UPST)

Upstart, leveraging AI for lending, also faced a post-earnings slide after its 5 August release. Shares ended at $68.76 on 9 August, down 1.11% daily but up 1.12% over 50 days, contrasting a 11.93% 200-day gain. The company reported mixed results, with forward EPS projected at 0.38 and current-year at 1.66, yielding a lofty forward P/E of 180.95.

Volume spiked to 5.5 million shares, below the 10-day average, amid sentiment from Zacks.com’s October 2024 trends analysis, which flagged AI-driven finance as a secular growth area for 2025. Motley Fool’s December 2024 piece on stocks poised to double in 2025 included UPST, citing its platform’s scalability. If lending volumes recover, this sell-off—down from a 52-week high of $96.43—could mark an entry point, though high valuation risks persist.

Dave Inc. (DAVE)

Dave, focused on banking for underserved consumers, beat estimates on 6 August with strong EPS growth. Yet, shares closed at $183.02, down 4.37% daily and 17.82% over 50 days, despite a robust 44.36% 200-day rise. Its forward P/E of 183.02 reflects optimism, backed by a Strong Buy rating averaging 1.3 from analysts.

Posts on platforms like X have echoed doubts on earnings quality due to non-operating factors, aligning with Markets Daily’s projection of sustained revenue growth. With a market cap of $2.47 billion and book value of 16.08, DAVE’s dip from a 52-week high of $286.45 might appeal to growth investors betting on fintech expansion.

Digital Advertising and Platform Plays

The Trade Desk (TTD)

The Trade Desk, a demand-side platform in programmatic advertising, suffered a dramatic 38.61% daily plunge to $54.23 on 9 August following its 7 August earnings. This erased gains, with shares now 29.06% below the 50-day average and 39.59% off the 200-day mark. Despite this, forward EPS of 1.93 supports a P/E of 28.10, reasonable for the sector.

Motley Fool’s 2024 analysis pegged TTD as a doubler candidate for 2025, emphasising its edge in connected TV. Volume hit 104.9 million shares, signalling capitulation, but Schwab’s sector outlook views communication services as poised for recovery. If ad spending rebounds, this sell-off from a 52-week high of $141.53 could be a classic overreaction.

Snap Inc. (SNAP)

Snap’s 5 August earnings triggered a milder sell-off, with shares at $7.41 on 9 August, down 1.72% daily and 16.41% over 50 days. Forward P/E of 18.07 appears attractive given EPS estimates of 0.41, though persistent losses (TTM EPS -0.32) weigh on sentiment.

Nasdaq data shows ad-related stocks often cluster in sell-offs, as seen in historical X posts from 2022. With a Hold rating of 2.8, SNAP’s position near its 52-week low of $7.08 suggests limited downside, potentially rewarding patient investors if user growth accelerates.

Roku Inc. (ROKU)

Roku, a streaming device leader, reported on 31 July, with shares steadying at $83.21 on 9 August, up 0.12% daily but down 1.55% over 50 days. Negative forward EPS of -0.63 yields a high P/E, but Motley Fool’s inclusion in 2025 doublers highlights platform potential.

Trading near the middle of its 52-week range (52.43-104.96), ROKU’s 4.73 price-to-book and Buy rating of 2.0 indicate resilience. Schwab’s outlook favours consumer discretionary amid digital shifts.

Consumer and Health Disruptors

Hims & Hers Health (HIMS)

Hims & Hers, in telehealth, rose 1.74% to $51.94 on 9 August post its 4 August earnings, bucking the sell-off trend but down 3.22% over 50 days. Forward P/E of 112.91 reflects growth pricing, with EPS estimates of 0.46.

Volume surged to 23.1 million, signalling interest. As per Zacks, health trends favour disruptors, positioning HIMS for upside if adoption grows.

AbCellera Biologics (ABCL)

AbCellera’s 7 August report led to a modest 0.24% gain to $4.25, up 13.61% over 50 days. Negative EPS (-0.56 TTM) and Strong Buy rating of 1.3 suggest biotech recovery potential, trading near lows.

Uber Technologies (UBER)

Uber dipped 3.36% to $89.56 on 9 August after 6 August earnings. Forward P/E of 37.95 and strong EPS (5.87 TTM) align with Forbes’ notes on past sell-offs as buy signals.

Crocs Inc. (CROX)

Crocs gained 1.14% to $75.24, down 26.07% over 50 days. Low forward P/E of 5.72 screams value in consumer goods.

e.l.f. Beauty (ELF)

ELF rose 1.85% to $101.77, down 13.77% over 50 days. Forward P/E 23.61 supports growth.

Toast Inc. (TOST)

Toast fell 5.55% to $43.08, down 3.47% over 50 days. High P/E of 123.09 but positive EPS trajectory.

Identifying the Standouts

Among these, TTD and UPST emerge as compelling opportunities, per analyst models from Motley Fool forecasting potential doubling in 2025, driven by sector tailwinds. CROX’s depressed valuation offers defensive appeal. Investors should weigh risks like economic slowdowns, but these dips underscore how earnings volatility can unearth gems.

Sentiment from professional sources like Morningstar remains cautiously optimistic on undervalued growth stocks post-rally, advising selective positioning.

References

• Morningstar. (2025). Q3 2025 Stock Market Outlook: After rally, what’s still undervalued? https://www.morningstar.com/markets/q3-2025-stock-market-outlook-after-rally-whats-still-undervalued
• Motley Fool. (2024, December 18). 3 top stocks that could double in 2025. https://www.fool.com/investing/2024/12/18/3-top-stocks-that-could-double-in-2025/
• Nasdaq. (2025). Market activity: Earnings. https://www.nasdaq.com/market-activity/earnings
• Charles Schwab. (2025). Stock Sector Outlook. https://www.schwab.com/learn/story/stock-sector-outlook
• Zacks. (2024, October). 3 stock trends to ride in 2025 and beyond. https://www.zacks.com/stock/news/2358074/3-stock-trends-to-ride-in-2025-and-beyond
• The Markets Daily. (2025, August 4). Root projected to post quarterly earnings. https://themarketsdaily.com/2025/08/04/root-root-projected-to-post-quarterly-earnings-on-wednesday.html
• Investing.com. (2025). Root Inc. Q2 2025 earnings call transcript. https://www.investing.com/news/transcripts/earnings-call-transcript-root-inc-q2-2025-sees-earnings-beat-stock-dip-93CH-4175323
• Forbes. (2024, May 8). Uber stock endures $12 billion sell-off on nauseating post-earnings ride. https://forbes.com/sites/dereksaul/2024/05/08/uber-stock-endures-12-billion-selloff-on-nauseating-post-earnings-ride
• Motley Fool UK. (2025, March 24). The 2025 stock market sell-off: An incredible opportunity to build wealth. https://fool.co.uk/2025/03/24/the-2025-stock-market-sell-off-an-incredible-opportunity-to-build-wealth
• FIREDUpWealth. (2022). Price reaction patterns. https://x.com/FIREDUpWealth/status/1528849233469661185
• StockSavvyShay. (2023). Earnings season volatility. https://x.com/StockSavvyShay/status/1907798343948157269
• Mayhem4Markets. (2022). Ad earnings cluster behaviour. https://x.com/Mayhem4Markets/status/1453461892232630277
• StockMKTNewz. (2025). Trade Desk earnings fallout. https://x.com/StockMKTNewz/status/1787946594479825334
• MatthiasMH2. (2025). Fintech recalibrations. https://x.com/MatthiasMH2/status/1953145994205712624