Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Apr 2, 2019 at 10:00 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks

The shares of Apyx Medical Corp (NASDAQ:APYX) are down 36.6% at $4.40, slicing through a long-term level of support. The medical supplies maker said it has withdrawn a marketing application for Renuvion, a device used for skin resurfacing. The move comes after the U.S. Food and Drug Administration (FDA) questioned data irregularities.

After topping out at a nine-year high of $8.89 on Jan. 28, APYX pulled back sharply to test support at the $6 level and 200-day moving average -- a trendline that has ushered the shares higher for the last year, and caught a March sell-off. However, today's drop has the equity breaching both of these levels, and headed for its worst day since Dec. 5, 2002, when it lost 40%, and its lowest close since last June.

Analysts have yet to chime in, but there's plenty of room for downward revisions. While all three covering brokerage firms maintain a "buy" or better rating, the average 12-month price target of $10 is more than double APYX's current price.

And while short sellers are sidelined today with the stock on the short-sale restricted list, a recent batch of bearish bettors is likely cheering. Short interest on APYX stock is up 163% since late November, but the 196,159 shares currently sold short account for a slim 0.6% of Apyx Medical's available float.

Published on Apr 2, 2019 at 10:03 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Quantitative Analysis
  • Analyst Update

Robotic surgery expert Intuitive Surgical, Inc. (NASDAQ:ISRG) has been a long-term gem on the charts, posting five straight yearly gains, including advances of 31.2%, 72.6% and 16.1% over just the past three years. Already in 2019, ISRG shares have added more than 20%, trading near record highs at yesterday's close of $575.54, and seasonal data shows that bulls may want to expect more upside in the months ahead. Analysts and options traders certainly are.

First of all, Raymond James weighed in on Monday by upping its price target to $630 from $600 on ISRG, and just this morning Deutsche Bank followed suit by beginning coverage with a "buy" endorsement and $630 price target. This is well into all-time-high territory for the equity, which peaked at $581.12 back in October. All but two of the 15 brokerages in coverage recommend buying the stock.

As for options activity, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have pushed Intuitive Surgical's 10-day call/put volume ratio to 2.24, showing call buying has more than doubled put buying in recent weeks. More telling still, this number ranks in the high 94th annual percentile, revealing such demand for long calls is highly unusual.

Interestingly, however, the largest increase in open interest during this two-week time frame occurred at the April 600 call, and most these positions were actually sold to open. In other words, these traders are betting on the $600 acting as a technical ceiling for the security over the next couple weeks. The rise in open interest at this contract, along with the recent surge in call buying, has left ISRG's Schaeffer's put/call open interest ratio (SOIR) at an annual low of 0.64.

Now finally getting to that seasonal data alluded to earlier, Schaeffer's Quantitative Analyst Chris Prybal notes that the stock has averaged an April gain of 5.5%, while also positing positive average returns for May, June, and July, with the latter month's average return coming in at an impressive 11.5%. Intuitive Surgical is trading up 0.6% at $579.20 so far this morning.

Published on Apr 2, 2019 at 10:12 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks
  • Analyst Update

The run-up to the initial public offering (IPO) of Lyft Inc (NASDAQ:LYFT) was treated with much fanfare. The shares have gotten off to a rocky start, shedding 26% from their March 29 open at $87.24 to yesterday's close at $69.01. Today, LYFT stock hit a record low of $66.10 -- well below its $72 IPO price -- and was last seen down 1.3% to trade at $68.08.

Analysts are starting to chime in on LYFT. The stock received its first ever "sell" rating from Seaport Global earlier, which also set its price target at $42, a steep discount to current levels. The analyst in coverage thinks investors are taking a "big leap of faith" that ride-sharing services will be more appealing than car ownership. Elsewhere, Cross Research initiated coverage with a "buy."

This mixed analyst attention echoes the broader trend seen toward Lyft, with three brokerages rating the stock a tepid "hold," and two rating it a "buy" or better. Meanwhile, the security's consensus 12-month price target of $84 is now a 26% premium to its current perch, making LYFT already susceptible to a shift in analyst sentiment.

Published on Apr 2, 2019 at 10:44 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Options Recommendations

Freight giant Union Pacific Corporation (NYSE:UNP) has put together a strong 2019, adding over 20% year-to-date. Back in early February, the company announced a massive buyback plan that amounted to 20% of the outstanding shares, which should act as a tailwind going forward. Plus, UNP recently bounced from the $160 level, site of its December highs, and could now be eyeing a fresh run to record highs.

WKEND UNP Chart March 29

 

Interestingly, options traders have been bearish toward the equity, with the 10-day put/call volume ratio of 2.93 ranking only 4 percentage points from a 12-month high at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Also, the Schaeffer’s put/call open interest ratio (SOIR) of 1.01 shows a rare put-skew among near-term traders. As such, an unwinding of all these bearish positions could fuel upside for UNP.

Union Pacific has a Schaeffer’s Volatility Index (SVI) of 23%, which ranks in the 34th annual percentile, showing relatively low volatility expectations priced into near-term contracts. Our recommended call option has a leverage ratio of 10.4, and will double in value on a 9% gain in the underlying stock.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this UNP commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Published on Apr 2, 2019 at 11:46 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Quantitative Analysis

Starbucks Corporation (NASDAQ:SBUX) stock has been red-hot in 2019, coming off a record high of $74.93 yesterday. Today, SBUX is up 0.4% to trade at $74.19, and options traders may want to set their sights on higher highs for the coffee stock, if history is any guide.

Specifically, the stock's Schaeffer's Volatility Index (SVI) of 16% ranks in the 9th percentile of its annual range. This indicates short-term options are cheap, from a volatility perspective.

What's more, per data from Schaeffer's Senior Quantitative Analyst Rocky White, the two other times since 2008 SBUX was trading within 2% of a new 52-week high while its SVI was ranked in the bottom 20th percentile of its annual range, the equity averaged a one-month gain of 4.67%. A similar jump from current levels would put the equity in record-high territory near $77.65 by May.

Starbucks stock gapped lower to start off March, but the damage was quickly contained by it ascending 30-day moving average. The shares are now up 15% year-to-date, and have turned in only two weekly losses in 2019 thus far. 

Daily Stock Chart SBUX

In the options pits, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the security with a 10-day put/call volume ratio of 1.14, which ranks in the elevated 88th percentile of its annual range. The elevated percentile ranking tells us the rate of put buying has been faster than usual in the past two weeks. A shift in sentiment from options traders could also create more tailwinds for SBUX.

What's more, the stock's Schaeffer's Volatility Scorecard (SVS) stands at a 81 out of a possible 100. This means the security has tended to make outsized moves over the last year, compared to what the options market had priced in -- a potential boon to premium buyers.

Published on Apr 1, 2019 at 12:43 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Earnings Preview

Investors are gearing up for a quarterly report out of GameStop Corp. (NYSE:GME), set for after the market closes tomorrow, April 2. Below we will take a look at how the video game retailer has fared on the charts, and dive into what the options market is pricing in for the stock's post-earnings move.

GameStop stock is down 0.6% at $10.22, and earlier touched a roughly 14-year low of $10.04. GME has been a long-term underperformer on the charts and over the past 12 months has shed 18%. The retailer did attempt a breakout in January, but despite several attempts, failed to push above resistance at the $15.50-$16 level and the falling 80-week moving average. 

Weekly GME with 80MA with Highlight

Moving onto GME's earnings history, the specialty retailer has closed lower the day after reporting in all but two of the past eight quarters. Over the past two years, the shares have swung an average of 7% the day after earnings, regardless of direction. This time around, the options market is pricing in a more than double 15.6% swing for Wednesday's trading.

Digging into options, data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows GME with a 10-day put/call volume ratio of 2.04, ranking in the 74th percentile of its annual range. In other terms, puts have been bought over calls at a faster-than-usual pace during the past two weeks. Specifically during this time frame, the May 11 put seems to be a favorite, with over 7,900 contracts having already exchanged hands. In terms of analyst attention, GameStop stock has been no stranger to bear notes.

 

Published on Apr 1, 2019 at 1:34 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Quantitative Analysis

The shares of video game maker Electronic Arts Inc. (NASDAQ:EA) ended the first quarter with a gain of nearly 29% -- their best quarter since the end of 2014. What's more, EA stock could extend its 2019 rally over the next few months, if recent history is any indicator.

Specifically, the maker of the "Apex Legends" and "Battlefield V" games has been among the best S&P 500 stocks to own in the second quarter of the year. EA has averaged a quarterly gain of 10.79%, and ended higher eight of the past 10 years, per recent data from Schaeffer's Senior Quantitative Analyst Rocky White.

Electronic Arts stock is up 1.4% at $103.09 today. The shares have rallied roughly 39% since their Dec. 26 low of $73.91, with recent pullbacks contained by their 40-day moving average, though upside momentum has stalled in the $105-$108 area. Meanwhile, the $103 area represents a 38.2% Fibonacci retracement of EA's decline from its July 2018 closing high to the aforementioned lows. Another 10.79% second-quarter surge from current levels would place EA around $114.21 -- territory not charted since October.

EA stock chart April 1

Despite the security's outperformance last quarter, a handful of analysts remain skeptical of EA. Currently, 32% of covering brokerage firms maintain tepid "hold" ratings, leaving the door open for potential upgrades to drive future gains. Likewise, the consensus 12-month price target of $102.37 represents a discount to current trading levels. Another strong second-quarter performance could also trigger price-target hikes.

Meanwhile, EA sports a Schaeffer's put/call open interest ratio (SOIR) of 0.62. While this ratio indicates that call open interest outnumbers put open interest among options expiring within three months, it registers in the 92nd percentile of its annual range. This mean that near-term options traders are more put-biased than usual right now. An exodus of short-term option bears could also be a boon for Electronic Arts.
Published on Apr 1, 2019 at 1:43 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity

Casino stocks are mostly higher today, thanks to the latest data out of gambling enclave Macau. Specifically, while Macau revenue fell 0.4% year-over-year in March, it was the biggest month of 2019 and was in line with expectations. In addition, optimism about U.S.-China trade relations is also likely boosting stocks with exposure to both countries. Against this backdrop, Wynn Resorts, Limited (NASDAQ:WYNN) shares have gapped higher today, and WYNN options are trading at an accelerated clip.

WYNN stock was last seen 7.5% higher at $128.32, and on pace to conquer its 200-day moving average for the first time since June. Further, the casino name is set for its biggest single-session gain of 2019. However, the security could find a familiar wall in the $130-$131 area, which stifled WYNN's rally attempts last month.

WYNN stock chart April 1

So far today, about 15,000 calls and 9,000 puts have traded on WYNN -- roughly two times the average intraday volume. Most popular is the weekly 4/5 130-strike call, and the April 135 call, where it looks like traders are buying the options to open. If so, the weekly call buyers expect WYNN to top $130 by Friday's close, while the April 135 call buyers expect the stock to be north of $135 by expiration on Thursday, April 18.

Today's appetite for bullish bets is just more of the same, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 3.30 indicates traders have bought to open more than three Wynn Resorts calls for every put in the past two weeks. What's more, this ratio is in the 94th percentile of its annual range, pointing to a bigger-than-usual call bias among buyers of late.

Published on Apr 1, 2019 at 1:46 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity

Fabless semiconductor concern Cirrus Logic, Inc. (NASDAQ:CRUS) is trading sharply lower today, after Craig-Hallum said the company's adaptive noise cancellation (ANC) is not in the new Apple AirPods 2, according to iFixit teardown. What's more, the brokerage firm suggested more Apple-related headwinds could be in store, since its channel checks point to a bigger-than-expected slowdown in iPhone sales. In response, CRUS put options are popular once again.

At last check, 850 puts had traded, which is light on an absolute basis, but ranks in the 88th annual percentile. It is also double the amount of calls traded so far. The most popular contract is the weekly 4/12 37-strike put, which was home to heavy open interest coming into today, so some traders may be selling positions. New positions, meanwhile, are being opened at the weekly 4/5 38-strike put. Anyone buying these puts would be betting on CRUS stock falling below $38 by Friday's close.

Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows that some put traders got a jump on Cirrus even before today. By the numbers, the equity's 10-day put/call volume ratio of 2.37 ranks in the 70th annual percentile, showing unusual demand for long puts over calls in recent weeks. More broadly, however, total open interest on the security is just 16,168 contacts -- 1 percentage point from an annual low.

At last check, the shares were trading down 4.3% at $40.33. While this price action puts a dent in the stock's year-to-date uptrend, the 200-day moving average looks like it's acting as support once again. On the other hand, CRUS has failed to overcome the $43-$45 region that blocked breakout attempts in August and November.

crus stock chart

Published on Apr 1, 2019 at 2:36 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity

The shares of Puma Biotechnology Inc (NASDAQ:PBYI) are down 9.3% to trade at $35.29, one of the worst stocks on the Nasdaq today, after the company inked an exclusive licensing deal with Pierre Fabre to develop and commercialize its cancer treatment, Nerlynx, in the European Union. The shares are likely suffering because, as analysts at Guggenheim and Cantor Fitzgerald pointed out, the deal could be viewed as negative for a PBYI buyout. The stock's normally dormant options pits have come alive today as a result.

More specifically, over 2,400 PBYI options have changed hands today -- double the average intraday amount, and volume pacing for the 95th percentile of its annual range. There's notable activity at the April 45 call, although it's unclear whether these options are being bought or sold. Meanwhile, it appears some bears are buying to open the May 30 put, which will move into the money if PBYI breaches $30 before May options expire.

Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows speculative players have bought to open 860 calls in the last 10 sessions, compared to just 27 puts. Plus, the resulting 10-day call/put volume ratio ranks in the 95th annual percentile, showing unusual demand for long calls over puts in recent weeks.

On the charts, Puma Biotechnology stock boasts a 74% lead in 2019, thanks to an early March bull gap generated from upbeat Nerlynx sales. Since then however, the shares have churned below the $44 level and racked up three straight weekly losses. Things could get worse this month, too, if history is any indicator. According to Schaeffer's Senior Quantitative Analyst Rocky White, PBYI has averaged an April loss of 7.9% since inception.

Daily Stock Chart PBYI

Published on Apr 1, 2019 at 2:52 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move

It's a rip-roaring start to the second quarter, with the stock market rallying on upbeat global manufacturing data. Among individual stocks making notable moves are online family care marketplace Care.com Inc (NYSE:CRCM), marketing analytics firm Comscore, Inc. (NASDAQ:SCOR), and pulmonary disease specialist Pulmatrix Inc (NASDAQ:PULM). Here's a quick look at what's moving the shares of CRCM, SCOR, and PULM.

CRCM Stock Eyes Lowest Close of 2019

Care.com stock is down 6.1% to trade at $18.56, on track to snap its five-day win streak, after a Wall Street Journal (WSJ) report suggested CRCM removed tens of thousands of unverified daycare listings ahead of a March 8 release of a WSJ article on the company. The stock dropped 12.5% on March 11, the first trading day after the original report was released, and is now down 28% from their March 4 five-year high of $25.81, headed toward its lowest close of the year.

There's room for analysts to adjust their outlooks on the sinking stock. While three of six brokerages maintain a "buy" or better rating, the average 12-month price target of $26.25 is a nearly 42% premium to current trading levels.

Comscore Sinks to Bottom of Nasdaq

The shares of Comscore are at the bottom of the Nasdaq, down 25.6% at $15.06, after the company's CEO abruptly resigned, citing "irreconcilable differences" with the board. Comscore's President Sarah Hofstetter also said she was stepping down.

A downgrade to "hold" from "buy" at SunTrust Robinson is only ramping up the selling pressure. The brokerage firm also slashed its SCOR price target by $6 to $21, explaining "the story has changed with the resignations."

More analysts could chime in, considering five of seven still carry "buy" or better ratings on the stock that's down more than 37% from its early March peak above $28. Plus, the consensus 12-month price target of $25.80 is a 73.1% premium to SCOR's current price.

New Partnership Fuels Pulmatrix Stock Surge

Pulmatrix shares have more than doubled today -- putting them at the top of the Nasdaq -- after the company teamed up with India's Cipla to develop PULM's Pulmazole, an inhaled version of its antifungal drug, itraconazole.This positive price action is welcome from an equity that was trading near record lows below $1 in early February. What's more, today's surge is being contained by PULM stock's 120-day moving average, which kept a tight lid on the shares in late 2018.

Published on Apr 1, 2019 at 3:09 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity
  • Quantitative Analysis

Casino stock Las Vegas Sands Corp. (NYSE:LVS) is higher, along with several sector peers, after Chinese gambling territory Macau reported well-received revenue data for March. As a result, the security is up 3.7% at $63.26 -- trading at a level not seen since early September. However, traders may not want to bet on LVS just yet. The equity just flashed a bearish technical signal that could precede a reversal lower, if history is any indicator. 

Taking a look at the charts, LVS stock has been on the rebound since bottoming at a two-year low of $47.39 on Dec. 24. The equity enjoyed a roughly 17% gain last quarter -- its biggest since September 2016 -- but prior to today's pop, a stiff ceiling at the $62 level capped any additional upside. Plus, the stock just came within one standard deviation from its 200-day moving average, after a lengthy period below the trendline.

Though this signal has only flashed on the charts one other time in the past three years, the stock suffered a 4.5% drop over the subsequent month, per data fom Schaeffer's Senior Quantitative Analyst Rocky White. A similar drop would drag LVS stock back below the aforementioned area of resistance at the $62 level, to around $60.44. 

LVS Chart Apr 1

Despite the technical warning, options bulls are already betting on the gambling name, with roughly 12,000 calls across the tape -- two times the average intraday volume, and nearly twice the number of LVS puts traded. It looks like most of this action is surrounding the April 62.50 call, with new positions being purchased for a volume-weighted average price of $1.52. If this is the case, breakeven for the call buyers at the close on Thursday, April 18 -- when the monthly options expire -- is $64.02 (strike plus premium paid), a level the equity hasn't touched in over six months.

Meanwhile, analysts are split on Las Vegas Sands. Half of the 10 in coverage consider the security a "buy" or better, while five have slapped it with a lukewarm "hold." Plus, the $65.44 consensus 12-month price target only represents a slim premium to current levels. 

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