Earnings on Deck: Visa Inc, Cirrus Logic, Inc., and Akamai Technologies, Inc.

V, CRUS, and AKAM are gearing up to take their turns in the earnings confessional

Oct 29, 2014 at 10:49 AM
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With the uncertainty surrounding Facebook Inc's (NASDAQ:FB) highly anticipated earnings results effectively in the rearview mirror, Wall Street will now turn its attention to the next round of quarterly reports due out this week. Drilling down, credit card issue Visa Inc (NYSE:V), integrated circuit specialist Cirrus Logic, Inc. (NASDAQ:CRUS), and cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM) are all gearing up to take their turns in the confessional after tonight's close.

  • Over the past four quarters, V has averaged a single-session post-earnings loss of 2%. This price action echoes the equity's withstanding technical showing, with the shares down a modest 2.5% year-to-date to trade at $217.14. On the sentiment front, option traders have taken the bearish route in recent months, as evidenced by the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.95, which ranks in the 91st percentile of its annual range. Outside of the options pits, though, analysts have waxed optimistic, with 76% of those covering Visa Inc maintaining a "buy" or better rating -- and not a single "sell" to be found. Additionally, the consensus 12-month price target of $249.90 stands at a 15% premium to current trading levels, and in territory yet to be charted.

  • Ahead of tonight's quarterly earnings results,CRUS is trading 2.2% lower at $21.56, but seems to have found a footing atop its 200-day moving average, currently located at $21.37. If history is any guide, CRUS could be poised to test the mettle of this trendline tomorrow, considering the stock has averaged a single-session post-earnings loss of 4.1% over the past four quarters. In the options arena, the equity's 50-day ISE/CBOE/PHLX call/put volume ratio of 8.60 ranks higher than 99% of all other readings taken in the past year, meaning calls have been bought to open over puts at an near-annual-high clip in recent months. With 12.4% of the security's float sold short, though, a portion of this activity could be a result of short sellers hedging their bearish bets against any earnings-induced upside. For Cirrus Logic, Inc.'s fiscal second-quarter, Wall Street is calling for a per-share profit of 54 cents.

  • AKAM has shed 0.5% today to linger near $56.84, and has pared its year-to-date gain to 20.5%. The options market is expecting the stock to be more volatile tomorrow, and is pricing in a roughly 8% post-earnings move for AKAM. In two of the past four quarters, the security has seen double-digit percentage moves in the session subsequent to reporting; specifically, a 20.6% pop in February, and an 11.2% plunge last October. Option traders have been rolling the dice on a repeat of the former, per the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.91, which ranks in the 84th annual percentile. This optimism is echoed elsewhere on the Street, with 15 out of 19 covering analysts maintaining a "strong buy" rating on the shares, versus four "holds" and zero "sells."

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