Zeroing in on Zoom Stock Before Earnings

The security is down 30% in 2022

Digital Content Manager
Feb 28, 2022 at 2:54 PM
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The shares of Zoom Video Communications Inc (NASDAQ:ZM) are up 4.7% at $131.18 this afternoon, as investors gear up for the company's fourth-quarter earnings report, which is due out after the close this evening. 

The stock has a ways to go if it wants to work off its near 30% year-to-date deficit, and even deeper 65% year-over-year loss. In fact, the stock is only two sessions removed from a two-year low of $114.26, while recent pressure at the 20-day moving average continues to loom. 

zm chart feb 28

Analysts sentiment, meanwhile, is split, with nine calling ZM a "buy" or better, and 12 saying "hold." On the other hand, the 12-month consensus price target of $271.35 is more than double the stock's current levels. 

Options traders are chiming in ahead of the event, with bulls and bears neck-and-neck. So far, 40,000 calls and 40,000 puts have exchanged hands, which is three times what's typically seen at this point. The most popular contract is the weekly 3/4 80-strike put, where positions are being sold to open, followed by the 100-strike put in the same weekly series where positions are being bought to open. 

Looking back, there's been a penchant for bearish bets. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 1.13 stands higher than all but 4% of readings from the past year. This means options traders are picking up puts at a quicker-than-usual clip. 

Short interest is also on the rise, up 18.7% in the last two reporting periods. The 11.53 million shares sold short make up 5.4% of the stock's available float. 

 

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