Black Box and Luxoft are in the red after dismal earnings
U.S. stocks are trading higher today, as soft inflation data and a strong performance from Apple stock help to offset tensions with North Korea. However, among the stocks swimming in red ink today are tech names Black Box Corporation (NASDAQ:BBOX) and Luxoft Holding Inc (NYSE:LXFT), as well as Chinese internet issue Alibaba Group Holding Ltd (NYSE:BABA). Here's a quick look at what's moving shares of BBOX, LXFT, and BABA.
Earnings Send Black Box Stock to Record Low
Worse-than-expected fiscal first-quarter losses knocked Black Box stock down a whopping 45% to trade at $4.05 -- a record low -- making BBOX the worst percentage loser on the Nasdaq today. The tech stock is now down roughly 73% year-to-date.
Although BBOX is on the short-sale restricted (SSR) list today, plenty of shorts are likely cheering today's decline. Short interest represents roughly 5% of BBOX's total available float. At the stock's average daily trading volume, it would take more than a week to buy back all the shorted shares.
Luxoft Cuts Revenue Forecast
Weaker-than-expected fiscal first-quarter earnings, as well as lowered full-year revenue guidance, have Luxoft trading in the red, last seen down 25.4% at $45.35 -- the worst percentage loser on the New York Stock Exchange. LXFT shares earlier fell to an intraday low of $40.30 -- territory it hasn't visited since February 2015. Down roughly 17% year-to-date, Luxoft stock is poised to close below its 200-day moving average for the first time in 2017.
As such, Wedbush lowered its rating on the stock to "neutral" from "outperform," while slicing its price target to $50 from $67. J.P. Morgan Securities also issued a price-target cut, to $69 from $77.50. Still, four of the seven analysts following the stock rate it a "strong buy," leaving room for additional bearish notes in the near term.
Alibaba Stock Pares Losses
Alibaba stock was down more than 2% at its session low, but has since pared most of its losses to trade at $151.50. Perhaps weakness from fellow Chinese internet stocks were dragging BABA shares into the red. In any case, BABA has pulled back since touching a record high of $160.38 on July 27, and today's drop has the security testing its 40-day moving average, which has acted as support since early January.
Despite Alibaba's long-term rally, short interest represents nearly nine days' worth of pent-up buying demand, at the equity's average pace of trading. What's more, BABA's Schaeffer's Volatility Scorecard (SVS) sits at 90, indicating Alibaba stock has tended to exceed option traders' volatility expectations during the past year.