Earnings Preview: Advanced Micro Devices, Inc., F5 Networks, Inc., and Goldman Sachs Group Inc

Advanced Micro Devices, Inc. (AMD), F5 Networks, Inc. (FFIV), and Goldman Sachs Group Inc (GS) will report quarterly earnings this week

Jan 19, 2016 at 11:52 AM
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While plenty of eyes will be on Netflix, Inc.'s (NASDAQ:NFLX) earnings announcement tonight, it's really just the tip of the iceberg. This week's packed docket includes quarterly reports from chipmaker Advanced Micro Devices, Inc. (NASDAQ:AMD), software developer F5 Networks, Inc. (NASDAQ:FFIV), and banking blue chip Goldman Sachs Group Inc (NYSE:GS). Below, we'll take the pre-earnings temperature on AMD, FFIV, and GS.

  • AMD will tell all after today's closing bell sounds, and the stock's weekly 1/22 $2-strike straddle is currently pricing in a 14.3% swing. On average, AMD typically experiences a one-day post-earnings move of 8.5%, looking back at the past eight quarters. This time around, it appears option traders expect Advanced Micro Devices, Inc. will resolve to the upside after reporting. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open nearly three calls for each put during the past 10 weeks. The resultant call/put volume ratio of 2.81 ranks in the 74th annual percentile, indicating a pronounced bias toward bullish bets over bearish. Technically, AMD is off just slightly today at $2.02, but has plummeted more dramatically since flirting with the $3 level late last year.
  • FFIV will hit the earnings confessional tomorrow night, and call buyers haven't been shy leading up to the quarterly event. Specifically, the tech stock's 50-day ISE/CBOE/PHLX call/put volume ratio of 1.56 sits in the high 87th percentile of its annual range. In terms of volatility expectations, the options market is pricing in a 7.9% move this week, per F5 Networks, Inc.'s weekly 1/22 $94.50-strike straddle. Meanwhile, the stock's average single-day post-earnings swing is 5.2% over the past eight quarters. On the charts, the stock's 20-day moving average has been ushering FFIV lower since late October -- and to a two-year low of $90.81 earlier this month. At last check, however, FFIV is 1.1% higher at $94.58, lifted by broad-market tailwinds.
  • GS hasn't been anything special on the charts, either, hitting an annual low of $153.81 last Friday as stocks sold off sharply. Today, the shares have edged 0.7% higher to trade at $156.69. Ahead of tomorrow morning's earnings report, the options market is pricing in a 5.1% move, compared to a typical one-day swing of 1.4% following the company's eight prior quarterly appearances. Traders hope Goldman Sachs Group Inc can follow the bullish post-earnings lead of fellow Dow component JPMorgan Chase & Co. (NYSE:JPM), based on data at the ISE, CBOE, and PHLX. Specifically, GS' 50-day call/put volume ratio of 2.39 ranks just 4 percentage points from a 12-month peak, with more than two calls bought to open for every put in recent months.

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