Earnings Preview: GoPro Inc, LinkedIn Corp, and ConocoPhillips

GoPro Inc (GPRO), LinkedIn Corp (LNKD), and ConocoPhillips (COP) are preparing to report quarterly earnings

Feb 3, 2016 at 12:39 PM
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Earnings season is now well underway, and traders today are digesting results from pharmaceutical concerns Gilead Sciences, Inc. (NASDAQ:GILD) and Merck & Co., Inc. (NYSE:MRK), among others. Looking ahead, camera maker GoPro Inc (NASDAQ:GPRO) will report after today's close, while social networking interest LinkedIn Corp (NYSE:LNKD) and oil issue ConocoPhillips (NYSE:COP) ​will hit the earnings confessional tomorrow. Below, we'll take a pre-earnings look at GPRO, LNKD, and COP.

  • As GPRO prepares to step up to the earnings plate, low holiday sales are expected to weigh heavily on results.  GoPro Inc also recently announced plans to cut about 7% of its workforce. The stock is trading 1.7% higher at $10.41 today, after shedding more than 80% in the past six months. So it's little surprise that traders have been wary of the stock. In fact, short interest on GPRO currently accounts for more than 50% of the equity's available float. Things are looking equally glum in the options pits, where GPRO's 50-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 0.65 -- higher than 92% of all readings from the past year. The options market is pricing in a 23.1% post-earnings swing for the stock -- much wider than its average one-day move of 11.6% over the last six quarters. The security's Schaeffer's Volatility Index (SVI) of 116% is at an annual high, meaning near-term options are especially pricey.
  • LNKD is down 6.3% at $190.69 today, as traders await tomorrow night's earnings report, and the option pits are heating up, with contracts crossing the tape at twice their average intraday rate. But LNKD option buyers will have to pay up to bet on a post-earnings move. The stock's 30-day at-the-money implied volatility just hit a 52-week high, at 64.5%, while it's SVI of 72% is also in the top percentile of its annual range. It looks like the options market is pricing in an 18.6% one-day move -- somewhat bigger than LinkedIn Corp's average post-earnings swing of 11.2% over the past eight quarters. 
  • As oil rebounds from a rough start to the week, COP is up 0.5% at $36.76 ahead of tomorrow morning's report. The stock has lost about 21% so far in 2016, having fallen steadily since its July 2014 all-time high. Analysts are mixed, with seven giving the security a "buy" or better rating, alongside six "holds" and one "strong sell." But option traders have been distinctly pessimistic. At the ISE, CBOE, and PHLX, ConocoPhillips has a 50-day put/call volume ratio of 1.47 -- in the 94th percentile of its annual range. Put open interest on the stock's options is close to a yearly high, and the market is pricing in a hefty 9.7% swing after earnings, compared to an average one-day move of just 0.9% after the company's past eight quarterly reports. And near-term option buyers could be getting a great deal. COP's SVI of 60% is lower than 89% of the past year's readings, while its Schaeffer's Volatility Scorecard (SVS) of 95 means the security has tended to make outsized moves compared to what the market has priced in over the past year.

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