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Stock returns after going-concern warnings, 2015-2026

Published 2026-10-19 · updated 2026-10-19 · RedFlagFilings research · 63,633 verified flags from SEC filings, 2015-01-02 to 2026-10-16

62,012verified flags

-50.0%median 1-year return vs SPY

74%trailed SPY over 1 year

-45.7%delisting-adjusted median vs SPY

Summary

Going-concern warnings: across 33,713 flags with a full year of price data (2015-2026), the median stock returned -36.6% and trailed the S&P 500 (SPY) by 50.0 percentage points over the next year; 74% did worse than SPY.
Doubt in the auditor's report (10-K): median 1-year return vs SPY -49.5%, 73% trailed SPY (n=9,117).
Doubt disclosed by management only: median 1-year return vs SPY -50.2%, 74% trailed SPY (n=24,552).
Doubt alleviated by plans or funding: median 1-year return vs SPY -35.3%, 71% trailed SPY (n=1,084).
2,536 of these stocks stopped trading within a year; counting them at their last trade moves the 1-year median vs SPY from -50.0% to -45.7%.
Nano caps (under $50M at the flag) had a median 1-year return vs SPY of -49.8% (n=22,767); there are too few large-cap cases for a reliable figure.

Historical averages, not a prediction, a trading strategy or investment advice. Many flagged stocks went up.

What this flag is

A going-concern warning means the company, or its independent auditor, says there is substantial doubt that the business can keep operating for the next 12 months without new money, asset sales or a restructuring. U.S. accounting rules (ASC 205-40) require management to make this assessment every quarter; the auditor adds an explanatory paragraph to its report on the annual 10-K when the doubt remains.

We split the warnings three ways: doubt raised in the auditor's report on a 10-K, doubt disclosed by management only (10-K or 10-Q), and doubt the company says its plans or new funding have alleviated (it still had to disclose the conditions behind the doubt, so we keep it as a milder flag).

Returns after the flag

Group	90 days after the filing						180 days after the filing						1 year after the filing
Group	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY
All going-concern warnings where doubt remains 62,012 flags	38,918	-5.9%	-5.0%	-11.3%	-9.2%	67%	37,177	-16.7%	-9.1%	-24.0%	-16.0%	69%	33,713	-36.6%	-15.2%	-50.0%	-29.5%	74%
Doubt in the auditor's report (10-K) 16,765 flags	10,655	-6.9%	-6.5%	-12.9%	-11.0%	67%	10,379	-18.3%	-11.5%	-26.6%	-18.8%	70%	9,117	-36.8%	-14.0%	-49.5%	-27.5%	73%
Doubt disclosed by management only 45,148 flags	28,218	-5.5%	-4.4%	-10.6%	-8.4%	67%	26,754	-16.4%	-8.2%	-23.1%	-14.9%	68%	24,552	-36.5%	-15.6%	-50.2%	-30.3%	74%
Doubt alleviated by plans or funding 1,621 flags	1,303	-3.2%	-2.4%	-8.7%	-6.8%	65%	1,238	-8.6%	-6.4%	-16.2%	-13.5%	65%	1,084	-20.4%	-14.9%	-35.3%	-28.1%	71%

* Mean = trimmed mean that drops the top and bottom 5% of returns (a few micro-cap returns of +1,000% or more would otherwise dominate). "vs SPY" is the stock's return minus the S&P 500 ETF's return over the same dates, in percentage points.

By year of the filing

Year	Flags	90 days			180 days			1 year
Year	Flags	n	median vs SPY	% trailed	n	median vs SPY	% trailed	n	median vs SPY	% trailed
2015	5,981	2,199	-13.1%	66%	2,196	-27.3%	70%	2,187	-49.7%	76%
2016	5,555	2,399	-8.8%	63%	2,392	-16.9%	65%	2,394	-38.3%	69%
2017	5,401	2,633	-12.0%	68%	2,623	-22.2%	68%	2,612	-40.3%	70%
2018	5,062	2,785	-9.8%	63%	2,768	-21.1%	67%	2,765	-47.0%	74%
2019	4,774	2,961	-18.5%	71%	2,964	-33.3%	72%	2,954	-49.0%	73%
2020	4,601	3,196	-0.1%	50%	3,192	+1.4%	49%	3,185	-5.9%	51%
2021	4,573	3,558	-16.3%	70%	3,520	-31.8%	73%	3,436	-53.6%	76%
2022	6,562	5,144	-6.2%	60%	4,846	-8.3%	59%	4,010	-51.2%	76%
2023	6,115	4,409	-14.4%	75%	4,175	-34.8%	80%	3,843	-77.2%	84%
2024	5,142	3,878	-17.7%	73%	3,808	-35.3%	75%	3,609	-62.5%	79%
2025	4,710	3,795	-13.4%	69%	3,723	-28.1%	71%	2,718	-59.3%	78%
2026	3,536	1,961	-16.6%	77%	970	-37.6%	82%	0	too few

Recent years have fewer completed windows: a 1-year return needs a full year after the filing.

By company size at the flag

Market cap at the flag	90 days after the filing						180 days after the filing						1 year after the filing
Market cap at the flag	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY
Nano-cap (under $50M) 26,625 flags	25,486	-10.0%	-1.8%	-14.6%	-6.1%	66%	24,562	-20.2%	-3.7%	-27.4%	-11.1%	68%	22,767	-36.6%	-5.9%	-49.8%	-20.5%	72%
Micro-cap ($50M-300M) 9,321 flags	8,653	+0.0%	-7.9%	-8.0%	-11.9%	70%	8,082	-5.5%	-13.9%	-16.5%	-20.6%	70%	6,935	-31.8%	-25.1%	-46.4%	-39.4%	77%
Small-cap ($300M-2B) 3,605 flags	3,352	+0.0%	-10.5%	-7.0%	-13.4%	67%	3,148	-5.9%	-18.5%	-16.1%	-23.2%	66%	2,700	-40.0%	-32.3%	-53.5%	-44.9%	76%
Mid-cap ($2B-10B) 100 flags	90	+0.3%	+0.4%	-6.7%	-4.4%	59%	85	-3.8%	+1.2%	-14.2%	-6.7%	60%	76	-25.0%	+0.4%	-36.0%	-12.3%	62%
Large-cap (over $10B) 8 flags	7	fewer than 30 completed windows					5	fewer than 30 completed windows					1	fewer than 30 completed windows
Market cap unknown at the flag 22,353 flags	1,330	-8.4%	-11.2%	-12.5%	-14.7%	71%	1,295	-26.3%	-21.2%	-32.9%	-27.1%	75%	1,234	-56.4%	-39.3%	-68.7%	-51.7%	81%

Delisting-adjusted returns

Group	90 days		180 days		1 year
Group	completed windows	delisting-adjusted	completed windows	delisting-adjusted	completed windows	delisting-adjusted
All going-concern warnings where doubt remains	-11.3%	-10.9% (637 stopped)	-24.0%	-22.6% (1,303 stopped)	-50.0%	-45.7% (2,536 stopped)
Doubt in the auditor's report (10-K)	-12.9%	-12.6% (126 stopped)	-26.6%	-25.6% (287 stopped)	-49.5%	-45.2% (659 stopped)
Doubt disclosed by management only	-10.6%	-10.1% (511 stopped)	-23.1%	-21.3% (1,016 stopped)	-50.2%	-45.9% (1,877 stopped)
Doubt alleviated by plans or funding	-8.7%	-8.7% (7 stopped)	-16.2%	-16.0% (18 stopped)	-35.3%	-33.4% (48 stopped)

Median return vs SPY. The plain figure only counts stocks that still traded at the end of the window. The delisting-adjusted figure also counts stocks that stopped trading first at their last close. Stopping can mean a delisting or bankruptcy, but also an acquisition, merger or going-private deal, and a last close can come before a later loss (for example shares that keep trading over the counter without price data), so the adjustment can move the median either way. Companies that no longer have any ticker are missing from both figures.

Notable large-cap cases

Filed	Company	Flag	Market cap at the flag	90 days vs SPY	1 year vs SPY
2026-05-11	EchoStar CORP (ECHO)	Going-concern doubt (10-Q)	$37B	-35.0%	pending
2021-02-25	PG&E Corp (PCG)	Going-concern doubt alleviated	$22B	-19.4%	-13.6%
2026-07-23	Summit Therapeutics Inc. (SMMT)	Going-concern doubt (10-Q)	$12B	pending	pending
2026-02-23	ImmunityBio, Inc. (IBRX)	Going-concern doubt	$10B	-18.1%	pending

Every flag in this group where the company was worth at least $10B on the filing date and its stock traded at least $25M a day (one row per company, its latest such flag, largest first). Big companies are rare in this data and are shown for context, not as a sample.

Method and caveats

Data: SEC EDGAR filings since 2015, each verified against the filing text with the same rules as the live site and checked by a separate second-opinion verifier and hand samples; split- and dividend-adjusted daily closes and historical market caps from our market data.
Returns: from the last close before the filing to the first close on or after 90 days, 180 days and 1 year later; "vs SPY" subtracts the S&P 500 ETF's return over the same dates. Groups with fewer than 30 completed windows are not shown.
Survivorship: companies without a traded ticker today are missing entirely, and stocks that stopped trading drop out of the plain figures (see delisting-adjusted). Missing companies are often the ones that failed, so the real outcome for investors was likely worse than these figures.
Overlap and size: companies often file several flags and windows overlap, so these are descriptive statistics, not significance tests. Most flagged companies are micro caps, while SPY is a large-cap index; part of the gap is a size effect.
Errors: classification is automated and errors are possible. Reused tickers, reverse splits and thin trading can distort individual returns; medians limit their effect.
Not investment advice: nothing here is a recommendation to buy or sell any security. Past returns say nothing certain about the future.

Download the numbers on this page: going-concern.csv · Chart image: cards/going-concern.png · Recent flags of this type: Going-concern warnings

More research: All research · 10-year study (all flags) · Late filings (NT 10-K / NT 10-Q) · Auditor changes (8-K Item 4.01) · Restatements (8-K Item 4.02)

Frequently asked questions

What happens to a stock after a going-concern warning?

Going-concern warnings: across 33,713 flags with a full year of price data (2015-2026), the median stock returned -36.6% and trailed the S&P 500 (SPY) by 50.0 percentage points over the next year; 74% did worse than SPY.

Does the type of going-concern warnings matter?

Doubt in the auditor's report (10-K): median 1-year return vs SPY -49.5%, 73% trailed SPY (n=9,117). Doubt disclosed by management only: median 1-year return vs SPY -50.2%, 74% trailed SPY (n=24,552). Doubt alleviated by plans or funding: median 1-year return vs SPY -35.3%, 71% trailed SPY (n=1,084).

Do delisted stocks change the result?

2,536 of these stocks stopped trading within a year; counting them at their last trade moves the 1-year median vs SPY from -50.0% to -45.7%.

Does company size matter?

Nano caps (under $50M at the flag) had a median 1-year return vs SPY of -49.8% (n=22,767); there are too few large-cap cases for a reliable figure.

Is this investment advice?

No. These are historical averages computed from SEC filings and market data. They are not a prediction or a recommendation to buy or sell any security, and many flagged stocks went up.