Earnings Preview: Halozyme Therapeutics Inc., Palo Alto Networks, Inc., and Stratasys, Ltd.

Analyzing recent option activity on Halozyme Therapeutics, Inc. (HALO), Palo Alto Networks Inc (PANW), and Stratasys, Ltd. (SSYS)

Feb 27, 2015 at 2:34 PM
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Among the stocks gearing up to report earnings on Monday are biopharmaceutical firm Halozyme Therapeutics, Inc. (NASDAQ:HALO), network security firm Palo Alto Networks Inc (NYSE:PANW), and 3-D printing specialist Stratasys, Ltd. (NASDAQ:SSYS). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on HALO, PANW, and SSYS.

  • HALO, which will release its fourth-quarter earnings report Monday night, has been on a hot streak, with the shares up 54.9% year-to-date -- despite a 2.1% drop so far today -- to hit $14.95. Accordingly, call activity is popular in Halozyme Therapeutics, Inc.'s options pits, as its 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 11.89 sits in the 68th percentile of its annual range. Meanwhile, in the session following its last four earnings reports, the shares of HALO have dropped an average of 3%. Traders are paying below-average prices for their near-term bets on the stock, as its Schaeffer's Volatility Index (SVI) of 62% sits in the 30th percentile of all similar readings taken over the past year.

  • PANW has also been a technical outperformer, with the shares notching a fresh all-time high of $146.28 yesterday. In today's session, the stock was last seen lingering near $142.36, which translates into a 99.1% year-over-year gain. Not surprisingly, sentiment in the Palo Alto Networks Inc's options pits is nearing a bullish peak ahead of Monday night's fiscal second-quarter earnings report. Specifically, the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.98 sits just 8 percentage points away from the highest similar reading taken over the past year. Traders hoping for PANW to continue its uptrend may have history on their side -- in the session following its last four earnings reports, the shares have advanced 6.6%, with the equity failing to have a negative post-earnings session since May 31, 2013. Historically speaking, speculators are paying inexpensive prices for their bets on the stock, as its SVI of 45% sits in the 27th percentile of its annual range.

  • On the other hand, SSYS, with the shares down 53.3% year-over-year to trade near $61.23. However, sentiment in the stock's options pits is call-heavy ahead of Monday morning's fourth-quarter earnings report -- which the company offered up a poorly received outlook for earlier this month. Drilling down, Stratasys, Ltd.'s 50-day ISE/CBOE/PHLX call/put volume ratio of 1.71 sits in the 79th percentile of its annual range. Additionally, in the session following its last eight earnings reports, SSYS has gained an average of about 3%, including a 14.9% pop on Aug. 7, 2014. Near-term options for the security are available for slightly above-average prices, as its SVI of 54% sits in the 60th percentile of its annual range.
 

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