Earnings Preview: Chipotle Mexican Grill, Inc., Yahoo! Inc., and VMware, Inc.

Earnings season is accelerating this week, with a number of notable companies reporting early on -- including this morning's results from Morgan Stanley (NYSE:MS) and Hasbro, Inc. (NASDAQ:HAS). Among the firms slated to step into the confessional tomorrow evening are burrito baron Chipotle Mexican Grill, Inc. (NYSE:CMG), Internet issue Yahoo! Inc. (NASDAQ:YHOO), and virtualization specialist VMware, Inc. (NYSE:VMW). Below, we'll take the pre-earnings temperature of CMG, YHOO, and VMW.

• CMG is off 1% this afternoon at $715.39, trimming its year-to-date lead to 4.5%. In recent months, the shares have been chopping up and down in the $700-$760 range, with the stock's 80-day moving average finally catching up this afternoon. It appears option traders are counting on the equity to break south following earnings, based on CMG's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.31 -- just 11 percentage points from a 12-month high. Speaking of tomorrow night's event, the options market is currently pricing in a post-earnings move of 7.3% in either direction, based on near-term at-the-money (ATM) straddle data. This is actually less than Chipotle Mexican Grill, Inc.'s average swing of 9.3%, in the immediate aftermath of the company's last eight reports.


• Meanwhile, the options market is pricing in a 5.8% move for YHOO following the firm's earnings report, based on its near-term ATM straddle. This is larger than the stock's typical single-day post-earnings swing of 3.9%, following its previous eight turns in the spotlight. Based on data at the ISE, CBOE, and PHLX, speculators are rolling the dice on post-event losses for Yahoo! Inc. The security's 10-day put/call volume ratio of 1.06 rests a mere 2 percentage points from an annual high, meaning traders have bought to open puts over calls at much faster-than-usual clip during the past two weeks. Despite boasting a month-to-date gain of more than 15.5%, YHOO ihas lost over one-third of its value in 2015 to trade at $33.40. Today, the shares are little changed, despite the noteworthy departure of one senior executive.


• Lastly, option bulls have been swarming VMW ahead of earnings, based on its 50-day ISE/CBOE/PHLX call/put volume ratio of 3.08 -- outranking 83% of comparable readings from the past year. In terms of expectations for tomorrow night, the stock's near-term ATM straddle is pricing in a roughly 5% swing following VMware, Inc.'s report -- roughly in line with its historical single-session post-earnings average, looking back eight quarters. On the charts, the shares have struggled mightily since gapping lower on Oct. 12 following the sale of VMW's parent company -- en route to a two-year low of $67.48 last Wednesday. At present, VMW is sitting on a year-to-date deficit of 16.6% to trade at $68.86.