The camera stock has underperformed over the past year
Continuing on with earnings season buzz, camera concern GoPro, Inc. (NASDAQ:GPRO) is expected to report its fourth-quarter earnings tomorrow, after market close. Below, we will take a look at how GPRO has performed on the charts recently, and what the options market has been pricing in for the stock's post-earnings action.
From a broader perspective, GoPro stock has had a disappointing year on the charts, losing nearly half its value. In fact, the stock touched a record low of just $5.04, on Jan. 8. At last check, however, GPRO was up 1.1% to trade at $5.52.
Looking towards earnings, GPRO has a grim history. The stock has only finished higher the session after earnings twice out of the past eight quarters. Further, the shares have averaged a post-event swing of 10% in either direction in the session after reporting, looking back two years. This time around, the options market is pricing in a larger-than-usual 16.2% move for Wednesday's trading, per at-the-money implied volatility (IV) data.
Despite its long-term disappointments, sentiment in the options pits has been leaning bullish in recent weeks. Data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), shows GoPro stock's 10-day call/put volume ratio of 3.89 in the 73rd percentile of its annual range. This suggests calls have been bought over puts at a faster-than-usual clip during the past two weeks.
What's more, short interest rose nearly 4% on the stock during the past two reporting periods, and now accounts for more than 30% of GPRO's total available float. At the stock's average daily trading volume, it would take just under three days for shorts to cover their bearish bets.