Schaeffer's Trading Floor Blog

Analyst Downgrades: Zynga Inc (ZNGA), Under Armour Inc (UA), and Angie's List Inc (ANGI)

Analysts downwardly revised their ratings on ZNGA, UA, and ANGI

by 9/6/2013 9:32 AM
Stocks quoted in this article:

Analysts are weighing in today on social gaming provider Zynga Inc (NASDAQ:ZNGA), athletic apparel guru Under Armour Inc (NYSE:UA), and business referral firm Angie's List Inc (NASDAQ:ANGI). Here's a quick roundup of today's bearish brokerage notes.

  • ZNGA has had a fine week on the charts, advancing 6.4% amid news of a massive expansion to its popular game Farmville 2. Towards the end of yesterday's session, the stock broke resistance at the $3 level for the first time since Aug. 14, and was last seen sitting one cent north at $3.01. Still, Barclays is hesitant toward ZNGA -- which now stands 27.5% higher year-to-date -- and initiated an "equal weight" rating for the stock in pre-market action. Elsewhere, skepticism toward ZNGA runs high, as well. From the 21 analysts weighing in, the stock has received 17 tepid "holds" and three "sell" or worse suggestions, compared to just one "strong buy" endorsement. Meanwhile, ZNGA's consensus 12-month price target of $3.21 is just a stone's throw away from its current price. This leaves plenty of room for a potential round of upgrades and/or price-target hikes, which could give Zynga Inc an extra boost.

  • Jefferies initiated a "hold" rating and a price target of $71 for UA, despite the stock's climb to a new record peak of $77.34 during yesterday's session. Stepping back, UA boasts a year-to-date gain of 58.4%, and was last seen perched at $76.89. Regardless, in UA's options pits, puts outnumber calls by a margin of nearly 3-to-2 among options expiring in three months or less, according to the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.44. This ratio ranks higher than 88% of other such readings taken over the past year, indicating short-term speculators are much more put-heavy toward UA than usual right now. Given Under Armour Inc's strong technical backdrop, such a heavy amount of put open interest could translate into options-related support further down the road, as these bearish bets start to unwind.

  • While ANGI sports an impressive year-over-year gain of 116.8%, the stock has been on a downturn of late, dropping 12.3% to trade at $20.60 in the past month alone. With that being said, Deutsche Bank slashed its price target for ANGI to $26 from $27 this morning. Meanwhile, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 158 ANGI calls for every 100 puts during the last 20 sessions, resulting in a 20-day call/put volume ratio of 1.58. Considering short interest grew 28.7% over the past two reporting periods -- now accounting for 25.5% of Angie's List Inc's available float -- it is likely that some of this seemingly bullish activity is actually due to short sellers hedging their bearish bets.

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