A Post-Earnings Selloff That Looks Overdone

This cybersecurity stock has taken a 24% hit since its Q2 report, despite beating EPS expectations and raising full-year billings guidance.

The reaction suggests investors are overly focused on near-term revenue concerns, missing the bigger story.

The company is a market leader with strong cash flow, expanding AI-driven products, and one of the lowest PEG ratios in its sector.

This could be the type of setup where patient investors are rewarded. See the breakdown and four other names to watch below.

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Delta Air Lines Inc. | DAL

Price: $59.42

Delta shares rallied sharply after the U.S. Department of Justice backed revoking antitrust immunity for its Aeroméxico joint venture.

While at first glance this looks like a setback, the change actually frees Delta from restrictive oversight and could allow more flexible partnerships in Latin America.

Without the formal joint venture structure, Delta can pursue new route opportunities and adjust pricing more aggressively.

Key markets like Los Angeles–Mexico City and New York–Mexico City are now in play for higher-margin traffic.

The airline retains its 20% stake in Aeroméxico, ensuring it still benefits from the relationship without the burden of government-imposed conditions.

Financially, Delta is solid. It trades at a forward P/E of just over 9, with revenue of $61.9B and an ROE over 30%. Analysts’ average target of $65.87 suggests upside from current levels. With manageable leverage and a 1.28% dividend, the balance sheet supports continued expansion.

Why It Matters:
Airlines typically struggle when regulation changes disrupt partnerships, but here Delta may emerge stronger.

Flexibility in high-traffic routes, coupled with already robust operations, positions DAL as one of the more attractive value plays in the sector.

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Cardinal Health Inc. | CAH

Price: $148.12

Cardinal’s Q4 report beat earnings expectations, but shares slid over 7% after the company announced a $1.9B acquisition of Solaris Health, the leading urology multiservices platform in the U.S. Investors appear concerned about the added debt and integration risk.

Still, the acquisition could be transformative, expanding Cardinal’s specialty healthcare reach in a profitable, high-demand segment.

Management expects the deal to close by year-end, financed with cash and new debt, but maintains leverage at manageable levels.

Cardinal also raised FY26 EPS guidance to $9.30–$9.50 from $9.10–$9.30, signaling confidence in core operations.

The stock trades at 22.9x earnings, offers a 1.4% dividend yield, and has a history of consistent payouts.

Given the nearly 24% YTD gain before this drop, the pullback may present an entry point for long-term investors focused on stable cash flow.

Why It Matters:
Market selloffs on acquisitions often reverse if integration succeeds.

Cardinal’s scale, balance sheet, and raised guidance suggest the fundamentals remain intact, making CAH worth watching as a potential value opportunity.

Rigetti Computing Inc. | RGTI

Price: $17.24

Rigetti’s Q2 results missed on both EPS and revenue, coming in at -$0.054 and $1.8M, respectively.

Despite this, the stock has surged over 1,800% in the past year on optimism around quantum computing breakthroughs and government contracts.

The company recently achieved 99.5% two-qubit gate fidelity, a milestone that improves computational accuracy and puts it closer to commercial-scale applications.

Rigetti has secured multiple awards, including from DARPA and Innovate UK, to advance quantum system scaling.

The roadmap includes a 36-qubit processor by mid-year and surpassing 100 qubits by year-end.

Analyst sentiment remains bullish, with several “Buy” ratings and targets up to $19, implying further upside.

While revenue is still minimal, Rigetti’s cash position of over $230M provides runway to execute on R&D without immediate dilution concerns.

Why It Matters:
Quantum computing is a long game.

Short-term earnings misses are almost inevitable, but Rigetti’s technical progress and government-backed funding keep it positioned as one of the purest public plays on the sector’s future.

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Cenovus Energy Inc. | CVE

Price: $15.06

Cenovus has lagged the broader Canadian market, down over 31% from 52-week highs despite strong operational performance.

Q1 production hit 818,900 BOE/d, close to record levels, and major projects like West White Rose and Narrows Lake are set to start producing within 12 months.

The company generates substantial free cash flow, with Q1 adjusted funds flow of $2.2B and nearly $1B in free funds flow for dividends or reinvestment.

Its current yield of 3.89% provides income while investors wait for potential capital gains.

Commodity price volatility remains a risk, but Cenovus’s integrated model, balancing upstream production with downstream refining, helps smooth earnings.

Analysts expect upside if oil prices remain stable or trend higher into 2026.

Why It Matters:
CVE is priced like a struggling producer but operates like a profitable major. If oil prices hold, upcoming project completions could drive a significant re-rating.

Fortinet Inc. | FTNT

Price: $79.33

Fortinet’s Q2 report last week beat EPS forecasts ($0.64 vs. $0.59) and posted 14% revenue growth, yet shares tumbled nearly 24% afterward.

The market reaction reflects concerns about slowing service revenue growth, not the company’s overall health.

Billings guidance was raised to $7.33B–$7.48B, and Fortinet maintains industry-leading gross margins above 80% with more cash than debt.

Its AI and cloud-focused product lines, especially in SASE and SecOps, remain in high demand as cybersecurity spending proves resilient even in choppy markets.

At a P/E in the low 30s and a PEG ratio of 0.68, valuation looks attractive relative to its growth outlook.

The 52-week low near $69 may act as support, with analysts seeing upside back toward triple digits over the next 12–18 months.

Why It Matters:
Post-earnings selloffs in market leaders can offer rare entry points.

Fortinet’s fundamentals and market positioning suggest this drop is more sentiment-driven than structural.

This week’s mix of earnings reactions, strategic deals, and sector tailwinds shows the market is still rewarding clear growth paths and punishing uncertainty.

For DAL, CAH, CVE, and FTNT, the stories share a common thread: strong fundamentals masked by short-term noise. In Rigetti’s case, the bet is purely on long-term innovation.

For investors, that means separating temporary volatility from structural change.

Guidance hikes, technical milestones, and operational leverage remain the key catalysts to watch through the rest of the quarter.

Stat of the Day – 2.7%
That’s the year-over-year rise in July consumer prices, unchanged from June and below economists’ forecasts.

While core inflation ran hotter at 3.1%, stable headline numbers keep rate-cut hopes alive for the fall.