Earnings Preview: Fitbit Inc, Tesla Motors Inc, and Groupon Inc

Among the big names soon headed to the earnings confessional are Fitbit Inc (FIT), Tesla Motors Inc (TSLA), and Groupon Inc (GRPN)

Nov 2, 2015 at 1:48 PM
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The earnings calendar shows no signs of relenting this week, with a number of notable names set to report over the next couple of days. Three companies in particular about to hit the confessional are exercise accessories maker Fitbit Inc (NYSE:FIT), electric car concern Tesla Motors Inc (NASDAQ:TSLA), and daily deals site Groupon Inc (NASDAQ:GRPN). Below, we'll take the pre-earnings temperature of FIT, TSLA, and GRPN.

  • FIT is scheduled to report quarterly numbers after the close today, and the options market is pricing in a 13.4% move, based on near-term at-the-money (ATM) straddle data. This is more or less in-line with the company's single-session post-earnings move in August -- its first as a publicly traded entity -- when it fell 13.6%. Heading into the event, short sellers have been placing downside wagers on Fitbit Inc. During the last two reporting periods, short interest jumped over 23%, and now accounts for about 11% of the stock's total float -- or 7.6 days' worth of trading activity, at typical volumes. On the charts, FIT has been making a series of highers highs and lows for the last month, recently overcoming resistance at its 60-day moving average, and was last seen up 2.2% at $41.45.

  • TSLA will report earnings after tomorrow's closing bell, and per the stock's near-term ATM straddle, the options market is pricing in an 8.8% swing in either direction. This is larger than the typical 7.4% move the shares have made in the session subsequent to Tesla Motors Inc's past eight reports. This time around, it looks like traders are counting on the stock to resolve to the upside, based on data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). TSLA's 10-day call/put volume of 1.18 across those exchanges ranks in the top quartile of its annual range, suggesting the options crowd has been scooping up bullish bets over bearish at a faster-than-usual speed recently. Technically speaking, the stock has popped 3.5% this afternoon to trade at $214.18 amid broad-market tailwinds, but continues to struggle at the $215 area just overhead, which has acted as resistance for the past few weeks.

  • GRPN is up 2.8% at $3.82, buoyed by news that one prominent rival will soon be shutting its doors. Another big move could be in store after the company's earnings report, due out tomorrow night. According to the stock's near-term ATM straddle, the options market is pricing in a 15% swing in either direction -- more than Groupon Inc's still-lofty 12.9% average move, in the immediate aftermath of its past eight trips to the confessional. Short sellers are counting on a continued slide for the shares, which have surrendered more than half of their value year-to-date, pressured by their 10-week moving average. Specifically, 14.5% of GRPN's float is sold short, equivalent to nine days of trading, at typical single-session levels.

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