Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jul 30, 2019 at 9:50 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks

The shares of Fiat Chrysler Automobiles NV (NYSE:FCAU) are reeling this morning, down 4.8% to trade at $12.98, one of the worst stocks on the New York Stock Exchange (NYSE). The drop comes after fellow European carmaker Renault slashed its revenue goal for 2019, citing weakening auto demand and the fallout of Carlos Ghosn’s arrest over at Nissan.

Earlier this summer, Fiat Chrysler scrapped plans to buy Renault, citing "the political conditions in France." Fiat Chrysler stock is now eyeing its worst day since May 31, which is also home to its annual lows of $12.58. The shares also surrendered their year-to-date breakeven level, and have once more breached their 50-day moving average, a trendline that's served as both support and resistance in 2019. 

For a stock that's struggled to breakout on the charts, short sellers seem a step slow. Short interest fell 10.4% in the two most recent reporting periods to 11.78 million shares. This accounts for a slim 0.8% of FCAU's total available float, and only 3.4 times the average daily trading volume.

Options traders are much more focused on puts. FCAU's 10-day put/call volume ratio of 2.47 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 92nd percentile of its annual range, indicating not only that puts have doubled calls in the past two weeks, but also that the rate of put buying has been much faster than usual.

Plus, the equity has had a tendency to make bigger moves than what options were pricing in over the past year. The stock's Schaeffer's Volatility Scorecard (SVS) sits at 98 (out of 100), which means buying premium has been an attractive strategy during the last 12 months.

Published on Jul 30, 2019 at 2:27 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move

Stocks are struggling today due to trade headwinds. Three of the names trading in the red today are online stylist Stitch Fix Inc (NASDAQ:SFIX), offshore drilling issue McDermott International (NYSE:MDR), and property management software provider AppFolio Inc (NASDAQ:APPF). Here's where the shares of SFIX, MDR, and APPF were trading at last check.

Amazon Hits Back at Stitch Fix

SFIX shares have dropped 4.5% to trade at $26.39 on news that Amazon.com (AMZN) is launching a personal shopping service. Stitch Fix is now set for its lowest close since early June, and is testing the 200-day moving average. Just below here is the $24 region, home to a bear gap from last month.

This should be good news for many new SFIX short sellers, who increased short interest by 19% last reporting period. At the stock's average pace of trading, it could take these bears nearly a week to cover their positions. Bears are also moving in on the options front, with new positions opening at the weekly 8/2 26- and 26.50-strike puts.

MDR Stock Near Bottom of NYSE Because of Forecast

MDR stock is getting absolutely destroyed today, down 37.6% at $6.29, as traders react to the company's surprisingly weak outlook. McDermott shares traded at their lowest point since 2004 earlier, falling down to $5.80, and put traders are likely cheering. The security's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 1.38, which ranks in the bearish 80th annual percentile.

Many of these traders could be adjusting their positions today, since put volume is running at 14 times the expected rate. The most popular contract by far is the November 5 put, which was home to heavy open interest coming into today. On the call side, new positions are opening at the September 6 strike.

AppFolio Stock Sinks on Weak Sales

APPF shares are also selling off post-earnings, down 8.4% at $94.56, due to the software company's disappointing sales for the second quarter. Also weighing on the stock is a downgrade to "underperform" from "neutral" at D.A. Davidson. Even with the sell-off, the stock is 17 points above its 200-day moving average, and has a year-to-date lead of 60%.

AppFolio saw a huge increase in short interest before earnings, with the number of shorted shares rising 66% in the last reporting period. As for other analyst adjustments we could see, there are only three brokerage firms tracking the stock, so additional downgrades may be unlikely.

Published on Jul 31, 2019 at 9:27 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks
  • Analyst Update

Lattice Semiconductor Corp (NASDAQ:LSCC) stock is up 12.3% in electronic trading, after the programmable logic device maker reported second-quarter adjusted earnings of 15 cents per share on $102.30 million in revenue. This was more than the consensus estimates of 11 cents per share in earnings and $99.72 million in revenue, and bullish analysts have been quick to chime in.

In fact, six brokerages have already boosted their LSCC price targets, with Cowen and Company and Rosenblatt Securities setting the highest bar at $21 -- a nearly 28% premium to last night's close at $16.41. Analysts are already upbeat on LSCC, with all five in coverage maintaining a "buy" or better rating; however, more price-target hikes could come down the pike, considering the 12-month consensus target sits at $17.86.

Today's earnings reaction is likely to catch some short sellers off guard, though. Short interest surged 22.9% in the most recent reporting period to 6.63 million shares -- the most since late 2016. This represents a healthy 5.4% of LSCC stock's available float, or 3.6 times the average daily pace of trading. A capitulation from some of the weaker bearish hands could create bigger tailwinds for Lattice Semiconductor shares.

Looking at the charts, the chip stock has put in a strong performance over the long term, and has more than doubled in value through last night's close. LSCC shares hit a 17-year high of $17.07 on July 15, but looks set to take out this milestone today -- poised to open near the $18.15 per share region.

Published on Jul 31, 2019 at 9:33 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks
  • Analyst Update

Clean energy stock Enphase Energy Inc (NASDAQ:ENPH) is set for record highs, trading up 21.5% before the open thanks to a second-quarter earnings beat. This just extends a strong year for the shares, which sport a lead of almost 360% in 2019, closing Tuesday at $21.65. A few bull notes have come through this morning, and today's move could also be good news for options traders.

But first, at least four brokerage firms have upwardly revised their outlooks since the earnings came out, including an upgrade to "buy" from "neutral" at H.C. Wainwright, which also boosted its price target to $36 from $16. Five of the seven covering brokerage firms already had "strong buy" ratings coming into today.

As for the options activity alluded to, data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 26.80, which ranks in the 78th annual percentile. This shows call buying has been more popular than normal, so today's gains could be good news for these bulls. To be more specific, peak open interest is at the August 22.50 call.

Despite the equity's absurd technical success, short interest is high. By the numbers, short interest accounts for 18.8% of the float, with 13.2 million shares sold short. If these bears are looking for any solace, they could note that ENPH's 14-day Relative Strength Index (RSI) is running hot, coming in at 67 even before today, so the shares could be due for a short-term breather at the least.

Published on Jul 31, 2019 at 10:02 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Analyst Update
  • Buzz Stocks

The semiconductor sector is in focus this morning, after Advanced Micro Devices, Inc. (NASDAQ:AMD) reported second-quarter earnings last night. While the chip name's earnings and revenue were in-line with expectations, its third-quarter guidance of $1.80 billion came in lower than the $1.95 billion expected due to lower demand for chips used for gaming. 

Analysts have rushed to chime in on the stock. Three brokerages have issued price-target hikes, the highest coming from Jefferies to $40 from $34, who noted that AMD has been executing its product cycle. However, Craig-Hallum cut its rating on the chip stock to "hold" from "buy," and Mizuho trimmed its price target to $36 from $37, citing competitive pricing from Intel (INTC). 

At last check, Advanced Micro Devices stock is down 8% to trade at $31.17, on track for its worst single-session drop since Jan. 28. AMD still boasts a 77% lead in 2019 though, and nabbed a 13-month peak of $34.86 on July 16. However, today's pullback appears to have breached support at its 50-day moving average, a trendline that caught a June pullback.

Echoing today, analyst sentiment is pretty evenly skewed. Of the 20 brokerages covering AMD, 11 rate it a "hold," and nine rate it a "buy" or better. Plus, the security's consensus 12-month price target of $32.39 is a discount to last night's closing perch of $33.87. 

Meanwhile, AMD has had a tendency to make bigger moves than what options were pricing in over the past year. This is per the stock's Schaeffer's Volatility Scorecard (SVS) reading of 85 out of 100, meaning buying premiums on the stock has been an attractive strategy for options traders.

Published on Jul 31, 2019 at 10:06 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks

The shares of GPS concern Garmin Ltd. (NASDAQ:GRMN) are skyrocketing today, after the firm unveiled second-quarter earnings and revenue that beat analysts' estimates. The company cited growing demand for its wearable and fitness devices, and lifted its 2019 revenue forecast on growing expectations for its aviation, marine, and auto units. GRMN stock is up 7.2% at $82.14, in response.

Today's surge has GRMN trading back atop its 80-day moving average -- a trendline that has provided pressure on the charts since early May. And while this ceiling has capped Garmin's last few rallies, the $76 region has emerged as a solid area of support for the equity since it gapped higher after earnings in February

While analysts have remained silent after earnings today, a round of upgrades could put even more wind at Garmin's back. Currently, all five in coverage have slapped the security with a tepid "hold" or "sell" rating, with not a single "buy" to be found. Likewise, the consensus 12-month price target of $78.40 represents a discount to current levels, suggesting price-target hikes could ensue.

In a similar vein, options traders have been upping the bearish ante too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GRMN sports a 10-day put/call volume ratio of 1.34. This means that bought puts have outnumbered calls during the past two weeks, and with this ratio sitting higher than 82% of all other readings from the past year, it's safe to say appetites for pessimistic positions have been larger than usual ahead of earnings. 

Published on Jul 31, 2019 at 3:15 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move

Stocks mostly traded near breakeven today, though the Dow was last seen sharply lower after Fed Chair Jerome Powell suggested more rate cuts may not be coming. Three names to watch in the meantime are electric vehicle producer Workhorse Group Inc (NASDAQ:WKHS), drugmaker Omeros Corporation (NASDAQ:OMER), and online education specialist 2U Inc (NASDAQ:TWOU). Let's take a closer look at what's moving the shares of WKHS, OMER, and TWOU.

Pence Comments Send Workhorse Soaring Again

WKHS is spiking once again, with the shares last seen trading 14.6% higher to $5.18, after Vice President Mike Pence told reporters the company is going forward with a plan to bring some manufacturing jobs back to the idled General Motors (GM) plant in Lordstown, Ohio. The Cincinnati-based company's stock initially surged back in May on news GM planned to sell the factory to Workhorse, and today is trading at its highest point since early 2017. The latest move brings the equity's year-to-date gain to a not-so-bad 880%.

Not many people are betting against the small-cap stock, either. Going by average daily trading volumes, it'd take short sellers less than one day to cover. Just one analyst is in coverage on WKHS stock with a "buy" rating. 

Omeros Pops on Manufacturing Deal

OMER stock is enjoying a 3.3% pop to trade at $15.92, thanks to news the company has agreed to a manufacturing deal for Omeros' narsoplimab.The shares have moved above the 200-day moving average after weeks of congestion at the closely watched trendline, but are still staring up at their early May highs near $21.

Some options traders may be betting on more upside from Omeros. New positions are opening today at the September 16 and 18 calls. Most the trading has taken place at the ask price, suggesting buying activity is occurring.

2U Stock Destroyed By Outlook

TWOU shares have completely collapsed, down 64.6% at $12.94, after earlier being halted. The stock also hit a five-year low of $12, and all this comes after the company again cut its full-year outlook due to competition and regulations in California around financial aid. Some bearish analyst notes have come through, with BMO downgrading its view to "market perform" from "outperform" and lowering its price target to $25 from $45.

There's certainly room for more downgrades to come through, since seven of the eight brokerage firms in coverage had "strong buy" recommendations. Meanwhile, some short sellers seemingly saw the writing on the wall, increasing the number of shorted shares by 13.5% in the last two reporting periods.

 

 

Published on Aug 1, 2019 at 9:51 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks

The shares of Shopify Inc (NYSE:SHOP) are soaring this morning, after the e-commerce company stepped into the earnings confessional. The Canadian firm reported second-quarter earnings and revenue that blew away analysts' expectations, and lifted its full-year revenue forecast. The earnings beat has SHOP stock up 8% at $343.09 in early trading, exploring record highs. 

Since touching an annual low of $117.87 on Dec. 24, SHOP has been on a tear. The stock has more than doubled this year, riding support at its rising 40-day moving average. Today's pop has the security set to topple a recent ceiling in the $340 region.

Despite this massive year-to-date gain, analysts still aren't sold on the stock, with 10 of the 21 in coverage calling it a "hold" or worse. Should SHOP keep surging, a round of upgrades could help propel the stock even higher. Plus, its consensus 12-month target price of $322.33 is now at a discount to current levels. 

Options players, on the other hand, were going all in with the bullish bets before earnings. SHOP currently sports a 10-day call/put volume ratio of 1.68 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 92nd percentile of its annual range, meaning calls have been picked up over puts at a much quicker clip than usual. 

Published on Aug 1, 2019 at 9:52 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks
  • Analyst Update

Exercise apparel name Fitbit Inc (NYSE:FIT) is suffering a massive selloff this morning, last seen down 20.1% at $3.36, a penny above the all-time low it tapped this morning. The fitness device company last night cut its full-year revenue forecast to between $1.43 billion and $1.48 billion, due to poor sales of its latest smartwatch, Versa Lite. For its second-quarter report, Fitbit announced a loss of 14 cents per share.

In response, no fewer than four analysts have already cut their price targets on the stock, with Citigroup cutting its target to $2 from $5. Meanwhile, on the back of its own cut to $5.75 from $7, D.A. Davidson said despite the disappointing forecast, business remains healthy. Wedbush also chimed in, saying FIT shares could outperform long term, but lowered its price target by $1 to $4. Coming into today, six of the nine covering brokerage firms carried a "hold," "sell," or "strong sell" rating.

Looking toward options, traders are looking less put heavy than normal at the moment. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.23, which ranks in the bottom percentile of its annual range.

Ahead of today's selloff, the shares of FIT were doing no better, continuing on a long-term downtrend since suffering a steep post-earnings bear gap in late February. The stock is also seeing pressure at its 40-day moving average, and now has a year-to-date loss of 15.5%.
Published on Aug 1, 2019 at 10:33 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Analyst Update

Women's healthcare concern AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) has underperformed in a big way in the past year, but analysts at H.C. Wainwright see a trend change coming. The brokerage firm this morning began coverage with a "buy" recommendation and $16 price target -- almost double Wednesday's close of $8.26.

The shares have added 8.4% out of the gate to trade at $8.95, but even this move leaves them just below the 20-day moving average and with a one-year deficit of more than 60%. This is likely why most other analysts are skeptical. Of the eight analysts in coverage, seven of them have "hold" or "strong sell"

Such pessimism is seen in high short interest levels as well. Short interest accounts for 31.1% of the total float, and it would take more than 11 sessions for the bears to cover their positions, based on average trading volumes. Some of these traders may be using call options to edge against big upside moves like we're seeing today, since call buying has doubled put buying in the past 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

AMAG traders will want to pay attention to the upcoming earnings released, tentatively scheduled for Aug. 7. The stock has sold off the day after earnings in three straight quarters, including a 12.3% pullback in May. Going back two years, the equity has averaged a one-day move of 8.5% after earnings.

Published on Aug 1, 2019 at 11:42 AM
Updated on Mar 19, 2021 at 7:15 AM
  • The Week Ahead

Amid a relatively light economic calendar, Wall Street will be watching another big dose of corporate earnings reports. While ride-hailing names Lyft (LYFT) and Uber (UBER) will each make their second appearances on the earnings stage since going public earlier this year, blue chip Walt Disney (DIS) will step up to the plate following the Dow stock's record-setting run on the charts. The semiconductor sector will remain in focus, too, with earnings from Microchip Technology (MCHP) and Skyworks Solutions (SWKS) also due.

Below is a brief list of some key market events scheduled for the upcoming week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

The Institute for Supply Management's (ISM) non-manufacturing index is due on Monday, Aug. 5. Avis Budget (CAR), Continental Resources (CLR), Marriott International (MAR), Shake Shack (SHAK), Take-Two Interactive Software (TTWO), Tenet Healthcare (THC), and Tyson Foods (TSN) will report earnings.

Tuesday, Aug. 6, brings the Job Openings and Labor Turnover Survey (JOLTS). Walt Disney (DIS), Bausch Health (BHC), Blue Apron (APRN), Chesapeake Energy (CHK), Hertz (HTZ), Match (MTCH), Microchip Technology (MCHP), Mosaic (MOS), Nu Skin Enterprises (NUS), Paysign (PAYS), Wynn Resorts (WYNN), WW International (WW), and Weibo (WB) will step up to the earnings plate.

The weekly crude inventories report will be released on Wednesday, Aug. 7. Earnings from 3D Systems (DDD), Applied Optoelectronics (AAOI), Canada Goose (GOOS), Capri Holdings (CPRI), CVS Health (CVS), CyberArk Software (CYBR), Infinera (INFN), Intrexon (XON), Lyft (LYFT), Roku (ROKU), Switch (SWCH), Skyworks Solutions (SWKS), and Teva Pharmaceutical (TEVA) are due.

Weekly jobless claims will hit on Thursday, Aug. 8Activision Blizzard (ATVI), AMC Entertainment (AMC), Cardinal Health (CAH), Cronos Group (CRON), Dropbox (DBX), Esperion Therapeutics (ESPR), Keurig Dr Pepper (KDP), Nektar Therapeutics (NKTR), Overstock.com (OSTK), Party City (PRTY), Symantec (SYMC), Uber (UBER), and Yelp (YELP) are slated to report earnings.

The headline producer price index (PPI) for July will be unveiled on Friday, Aug. 9. Tidewater (TDW), Tribune Media (TRCO), and U.S. Concrete (USCR) will release earnings reports.

Published on Aug 1, 2019 at 3:06 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move

After surging higher earlier on renewed hopes for another Fed rate cut, the major stock market indexes are sinking on a round of new tariffs on Chinese goods. Three names to watch in the meantime are healthcare stocks Myriad Genetics, Inc. (NASDAQ:MYGN) and Abiomed, Inc. (NASDAQ:ABMD), as well as oil issue Whiting Petroleum Corp (NYSE:WLL). Let's take a closer look at what's moving the shares of MYGN, ABMD, and WLL. 

MYGN Stock Scales Nasdaq on UNH Coverage

MYGN is at the top of the Nasdaq today, after UnitedHealth Group (UNH) decided to cover pharmacogenetic testing via the firm's GeneSight Psychotropic treatment in patients with major depressive disorder and anxiety. The UNH nod had the equity clocking a nine-month high of $46.15 earlier, now up 51% to trade at $44. 

While short interest is already diminishing, down 8.3% during the last two reporting periods, there's still plenty of space for a "short squeeze" situation to shoot the shares even higher, should even more of these bears begin to hit the exits. Right now, the 13.9 million shares sold short represent a solid 19.1% of the stock's available float. Plus, at MYGN's average pace of trading, it would take 13 days to cover all these pessimistic positions. 

Abiomed Stock Spirals on Guidance Drop

On the other end of the Nasdaq, Abiomed stock is spiraling, down 27.8% at $201.01, after the company reported second-quarter revenue that fell below analysts' estimates, and lowered its 2020 revenue forecast. The firm said it is making changes to distribution and implementing external initiatives in order to generate future growth. The plummet also prompted BTIG to downgrade the stock to "neutral" from "buy." 

ABMD is eyeing the worst day its seen since 2015, as a result, bottoming out at a new annual low of $198.24 earlier.  Looking back, the security has been on the decline since peaking at $459.75 back in October, amid pressure from its 160- and 120-day moving averages. 

WLL Stock Hits Record Low After Earnings Surprise 

Oil name Whiting Petroleum is crumbling after announcing a surprise second-quarter loss, as well as a 33% cut in jobs and asset sales, fueled by the firm's failure to keep up with increasing oil output in the U.S. through new pipeline construction. The stock is the worst on the New York Stock Exchange today, and touched an all-time low of $10.66 earlier. WLL is now trading down 36.9% at $11.15. 

This earnings shock has already started attracting negative attention from analysts, with KeyBanc downgrading the security to "sector weight" from "overweight." The stock is ripe for more downgrades too. WLL has 13 "strong buy" ratings on the board, compared to just nine tepid "holds," and not a single "sell." Plus, its consensus 12-month target price of $28.17 is more than double current levels, which might lead to some price-target cuts down the line. 

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