Earnings Preview: TubeMogul, Vivint Solar, and Macy's

Analyzing recent option activity ahead of earnings from TubeMogul Inc (NASDAQ:TUBE), Vivint Solar Inc (NYSE:VSLR), and Macy's, Inc. (NASDAQ:M)

by Griffin Kruse

Published on May 12, 2015 at 3:18 PM
Updated on Jun 24, 2020 at 12:01 PM

Among the stocks gearing up to report earnings are digital branding specialist TubeMogul Inc (NASDAQ:TUBE), alternative energy concern Vivint Solar Inc (NYSE:VSLR), and retailer Macy's, Inc. (NYSE:M). Below, we'll take the pre-earnings temperature of TUBE, VSLR, and M. 

  • The shares of TUBE are 4% lower at $15.36, ahead of the company's trip to the earnings confessional later tonight. Options traders have shown a preference for puts over calls -- during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 5.57 TUBE puts have been bought to open for every call. Meanwhile, TUBE has only reported earnings three times since going public last July, with the shares shedding 23% in the session immediately following its last earnings release in February. In fact, TubeMogul Inc has struggled to fill that bear gap, with recent rebound attempts capped by its 120-day moving average. The options market is pricing in a post-earnings move of 15.7% this go-around, per the stock's short-term at-the-money (ATM) straddle. Short-term options players have been paying relatively bottom-of-the-barrel prices, as TUBE's Schaeffer's Volatility Index (SVI) of 74% is higher than just 7% of all similar readings from the past year. 
  • On the other hand, VSLR has been a technical outperformer, with the shares up over 60% year-to-date to hover near $14.77, thanks in part to a post-earnings bull gap in March. Not surprisingly, options traders have favored calls lately -- over the past 50 days at the ISE, CBOE, and PHLX, 2.30 Vivint Solar Inc calls have been bought to open for every put. The shares have moved an average of 18.9% in the session after reporting; prior to the aforementioned March release, VSLR's first two post-earnings reactions were to the downside. After VSLR steps into the earnings spotlight tonight after the close, the options market is anticipating a move of 13.3%, per its short-term ATM straddle. Near-term options are available for historically inexpensive prices, as VSLR's SVI of 70% reads in the 17th percentile of its annual range. 
  • The shares of M have taken a step back recently, down 6.5% since hitting an all-time high of $69.98 on April 8, to linger around $65.41. This is likely music to the ears of many options traders, as sentiment in the options pits has been bearish. Drilling down, Macy's, Inc.'s 10-day ISE/CBOE/PHLX put/call volume ratio of 3.68 ranks in the 91st annual percentile. Mirroring this indicator is the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.37, which is higher than 84% of all similar readings from the last 12 months. Said another way, short-term traders have rarely been this put-skewed on the security, when it comes to options that expire in three months or less. Elsewhere, M has moved an average of 3.5% in the session immediately following its last four earnings reports, with only one of those sessions resulting in a gain. After M releases its earnings tomorrow morning, the options market expects the equity to move 4.3% by Friday's close, per its near-term ATM straddle. Short-term options players are paying relatively inflated prices for their bets on the security, as its 30-day at-the-money implied volatility (IV) of 34.6% is higher than 99% of all equivalent readings taken over the past year. 

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