Bulls Think PTON Could Muscle Higher Ahead of Earnings

The stock has already added over 20% this year

Digital Content Manager
Feb 4, 2020 at 3:17 PM
facebook twitter linkedin

Fitness concern Peloton Interactive Inc (NASDAQ:PTON) has been chugging quietly higher since coming under scrutiny for its holiday advertising tactics back in December, with solid support at the 60-day moving average emerging late that month. In fact, the equity is already up 21% year-to-date, with the stock looking to notch its eighth straight win today, just ahead of its fiscal second-quarter earnings report, slated for after the close tomorrow, Feb. 5. At last check, the equity is up 2.8% to trade at $34.30.

PTON Feb 4

Optons traders are coming in hot ahead of PTON's earnings event. So far, 68,000 calls and 22,000 puts have crossed the tape -- three times what's typically seen at this point. By far, the most popular contract is the weekly 2/7 35-strike call, where positions are being opened. Positions are also being opened at the weekly 2/7 41-strike call and the 2/14 37-strike call, which may mean these traders are expecting more upside for Peloton. 

During its only other report since going public, PTON shed 7.6% in the following session. This time around, the options pits are pricing in a 21.9% next-day swing for the equity, regardless of direction. 

BMO chimed in before tomorrow's quarterly announcement, too, initiating coverage with a "market perform" rating, and a $27 price target. Coming into today, an overwhelming 20 of the 21 analysts in coverage considered PTON a "buy" or better, while its consensus 12-month price target sits at $35.84 -- just a slim 3% premium to current levels. 


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners