Earnings Preview: Groupon Inc, Whole Foods Market, Inc., and TripAdvisor, Inc.

Groupon Inc (NASDAQ:GRPN), Whole Foods Market, Inc. (NASDAQ:WFM), and TripAdvisor, Inc. (NASDAQ:TRIP) will unveil their quarterly earnings reports tomorrow

by Karee Venema

Published on Feb 10, 2016 at 11:51 AM
Updated on Feb 10, 2016 at 4:27 PM

It's a busy day for quarterly earnings reports, with Wall Street digesting the latest results from Walt Disney Co (NYSE:DIS) and SolarCity Corp (NASDAQ:SCTY), among others. Looking ahead, a pair of notable cybersecurity firms are on deck to release their earnings reports, as are coupon concern Groupon Inc (NASDAQ:GRPN), organic grocery chain Whole Foods Market, Inc. (NASDAQ:WFM), and online travel company TripAdvisor, Inc. (NASDAQ:TRIP). Below, we'll take a pre-earnings look at GRPN, WFM, and TRIP.

  • In the past 52 weeks, short-term option traders have rarely been as put-skewed toward GRPN as they are currently, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.72 -- in the 94th percentile of its annual range. For those purchasing premium, the equity's near-term options have baked in extremely high volatility expectations, which isn't too surprising given tomorrow night's scheduled event. Specifically, Groupon Inc's Schaeffer's Volatility Index (SVI) of 151% is docked at a 12-month peak. Looking back over the past eight quarters, the security has made some big moves, averaging a single-session post-earnings swing of 15.4%. On the charts, meanwhile, the shares have been making a series of lower lows over the past year -- bottoming at a record $2.16 yesterday -- and were last seen up 0.4% at $2.23.

  • WFM has put in a dismal performance over the past 52 weeks, shedding more than 48%. In fact, the shares tagged a four-year low of $28.07 on Monday, and were more recently seen lingering around $29.02. Nevertheless, call buying has been popular ahead of tonight's results. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 4.00 sits just 7 percentage points from a 52-week peak. In today's trading, calls are crossing the tape at two times the average intraday rate, and it appears pre-earnings options traders are possibly buying to open WFM's February 31 and 32 strikes.

  • In the weeks leading up to tomorrow morning's earnings report, TRIP -- and a number of its sector peers -- has been walloped by the brokerage bunch, exacerbating the equity's already troubled technical backdrop. Year-to-date, the shares have surrendered 36% to trade at $54.15, and notched a two-year low of $53.51 yesterday. Per the equity's SOIR of 1.29 -- in the 78th annual percentile -- speculative players are more put-heavy than usual among options expiring in three months or less. To be more specific, TRIP's front-month gamma-weighted SOIR, which measures near-the-money open interest in the front-month series, is docked at 3.39. Meanwhile, the options market is pricing in a big 18% post-earnings single-session swing for TripAdvisor, Inc. Over the past eight quarters, the equity has averaged a move of 9.3% in the session subsequent to reporting.

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