Earnings on Deck: QUALCOMM, Inc., Tesla Motors Inc (TSLA), and Whole Foods Market, Inc.

Previewing QCOM, TSLA, and WFM ahead of their upcoming earnings reports

Nov 4, 2014 at 10:21 AM
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Earnings season keeps churning along, and several popular names are slated to report quarterly numbers tomorrow. Among them are communications technology firm QUALCOMM, Inc. (NASDAQ:QCOM), electric automaker Tesla Motors Inc (NASDAQ:TSLA), and organic grocer Whole Foods Market, Inc. (NASDAQ:WFM).

  • QUALCOMM, Inc. (NASDAQ:QCOM) will report fiscal fourth-quarter earnings after the close tomorrow. Going in, analysts are projecting a profit of $1.31 per share from the company. Looking back, however, QCOM has struggled in the wake of its last four earnings reports, shedding 2.8%, on average, in the session subsequent to the event. On the charts, the shares are up a respectable 4.4% in 2014 to trade at $77.53. Nevertheless, during the past year, short-term options speculators have rarely preferred puts (relative to calls) as much as they do now. Specifically, QCOM's Schaeffer's put/call open interest ratio (SOIR) of 0.91 stands just 4 percentage from a 12-month high. What's more, traders have been buying to open puts over calls at an above-average pace in recent weeks, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). QCOM's 10-day put/call volume ratio across those exchanges registers at 0.50 -- or higher than 65% of all comparable readings taken in the previous year.

  • Tesla Motors Inc (NASDAQ:TSLA) will also step up to the earnings plate Wednesday night, and Wall Street is calling for a per-share loss of a penny. The shares tend to make sizable post-earnings moves -- over the past eight quarters, in fact, TSLA has swung an average of 11.9% in the session following its report, including an 11.3% loss in May and a 24.4% gain in May 2013. On the charts, the stock is down 0.3% this morning, but remains nearly 61% higher year-to-date at $241.81. Elsewhere, TSLA's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.03 is just 7 percentage points shy of an annual peak, suggesting traders have bought to open bearish bets over bullish at an accelerated clip recently. However, some of this action may have been at the hands of shareholders looking for a pre-earnings downside hedge.

  • Finally, Whole Foods Market, Inc. (NASDAQ:WFM) is off 1.1% to trade at $39.50, but has added 3.6% since the end of September. Like both companies above, the granola grocer is scheduled to step into the earnings confessional tomorrow evening, where analysts are counting on a per-share profit of 32 cents. Should WFM top expectations, it could benefit from significant short-covering activity. In fact, nearly one-tenth of the equity's total float is sold short, which would take more than seven sessions to buy back, at WFM's average daily trading volume. Likewise, the stock could potentially benefit from a round of upgrades, considering 13 of the 23 brokerage firms following the shares have doled out "hold" or worse assessments.
 

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