Cloud Stock on the Rise Ahead of Earnings Report

The equity has found some support at its 20-day moving average

Digital Content Manager
Aug 23, 2022 at 12:14 PM
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Earnings reports are continuing to trickle in, and now investors are looking ahead to a fiscal first-quarter turnout from software concern NetApp Inc. (NASDAQ:NTAP), which will be due out out after the close tomorrow, Aug. 24. At last check, NTAP was up 1% at $73.77. Below, we'll take a look at the stock's recent performance, as well as its past post-earnings activity. 

The equity is currently cooling from rally that lasted for most of the third quarter, with NTAP eventually losing steam at the 140-day moving average -- a trendline that also snuffed out a rally in the first quarter of 2022. The stock's 20-day moving average has helped keep some of this pullback in check, however, leaving the stock with a 13.3% quarter-to-date lead. Year-to-date, NTAP is still down 19.7%. 

ntap aug 23

Looking back over the last two years' worth of earnings reports, NTAP has seen positive next day returns after six of these instances, falling lower twice, which includes a 14.5% post-earnings plummet in February 2021. Regardless of direction, NetApp stock has averaged a next-day swing of 5.2%. This time, the options pits are pricing in a 9.6% move. 

NetApp's options pits lean bullish right now. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 50-day call/put volume ratio of 1.27, which sits higher than all but 2% of annual readings. In other words, there's been a healthier-than-usual appetite for long calls of late. 

Meanwhile, are mostly optimistic, but there's still room for post-earnings bull notes. Of the 17 in coverage, seven still call NTAP a "hold," while the 12-month consensus price target of $86.67 is a 17.3% premium to current levels. 


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