Analyst Downgrades: Aerie, HomeAway, and Ubiquiti

Analysts downwardly revised their ratings on Aerie Pharmaceuticals Inc (AERI), HomeAway, Inc. (AWAY), and Ubiquiti Networks Inc (UBNT)

Apr 24, 2015 at 9:16 AM
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Analysts are weighing in today on drugmaker Aerie Pharmaceuticals Inc (NASDAQ:AERI), vacation rental marketplace HomeAway, Inc. (NASDAQ:AWAY), and tech stock Ubiquiti Networks Inc (NASDAQ:UBNT). Here's a quick roundup of today's bearish brokerage notes on AERI, AWAY, and UBNT.

•    AERI has lost more than half of its value in pre-market trading, following disappointing eye drug trial results and a round of bearish brokerage notes. Specifically, no fewer than five analysts downwardly revised their price targets on the security -- including Cantor, which slashed its target to $12, and also reduced its rating on the shares to "hold" from "buy." This morning's anticipated bear gap could wipe out Aerie Pharmaceuticals Inc's year-over-year gains, which sat at 122%, based on last night's close at $35.39. In recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have been betting on (or hedging against) a move lower. AERI's 10-day put/call volume ratio is 3.55, indicating more than three calls have been bought to open for every put.

•    AWAY is smarting this morning after the company announced weaker-than-expected earnings and a major management shake-up. Analysts are throwing salt into the wound, too, with four brokerage firms cutting their price targets on the security. At last check, HomeAway, Inc. is down 5.2% ahead of the open. Last night, the stock settled at $32.17, up 8% in 2015. Elsewhere, options traders have been betting bearishly on AWAY in recent months, per its 50-day ISE/CBOE/PHLX put/call volume ratio of 0.80 -- which sits just 3 percentage points from an annual high.

•    Finally, UBNT is struggling ahead of the bell, after the firm issued disappointing preliminary results for its fiscal third quarter, and reported the resignation of its chief financial officer. This news was followed by a round of negative analyst attention, with four brokerage firms cutting their price targets on the stock -- including BMO, which slashed its target by $8 to $26, and lowered its outlook to "market perform" from "outperform." On the other hand, SunTrust Robinson boosted its price target on Ubiquiti Networks Inc to $42 from $37. Last night, the shares closed at $31.43 -- up 6% year-to-date -- but are poised to plunge 14% at the open. This is music to the ears of short sellers. More than one-third of UBNT's float is sold short, representing nearly three weeks' worth of buying power, at the equity's average daily trading levels.
 

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