Analyst Downgrades: Twitter, Verint Systems, Ambarella

Analysts downwardly revised their ratings on Twitter Inc (TWTR), Verint Systems Inc. (VRNT), and Ambarella Inc (AMBA)

Sep 3, 2015 at 9:47 AM

Analysts are weighing in today on microblogging platform Twitter Inc (NYSE:TWTR), tech stock Verint Systems Inc. (NASDAQ:VRNT), and semiconductor specialist Ambarella Inc (NASDAQ:AMBA). Here's a quick roundup of today's bearish brokerage notes on TWTR, VRNT, and AMBA.

TWTR has been a disaster on the charts recently, hitting a record low of $21.01 late last month and losing more than one-fifth of its value in 2015. As such, Canaccord Genuity cut its price target on the stock to $40 from $45. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), though, traders have been upping the bullish ante. Twitter Inc's 10-day call/put volume ratio of 3.39 outstrips 88% of comparable readings from the past year. An unwinding of these optimistic bets could result in headwinds. Out of the gate, TWTR is up 1.6% at $28.27. In other news, the company will meet today and could name co-founder and interim CEO Jack Dorsey its permanent chief.

Despite the company's better-than-expected second-quarter earnings, VRNT
is down 4.3% at $49.43 -- and fresh off a new annual low of 48.28 -- due to mixed guidance. Further fanning the bearish flames is a round of price-target cuts from no fewer than four brokerage firms, with the deepest cut coming courtesy of Credit Suisse (to $60 from $70). This is a welcome development in options land, where bearish sentiment has been on the rise. In fact, Verint Systems Inc.'s 50-day ISE/CBOE/PHLX put/call volume ratio of 1.54 sits just 3 percentage points from a 12-month high. Mirroring this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.13 outstrips 99% of all comparable readings from the past year.

AMBA saw its rating cut to "market perform" at Barrington this morning, sending the shares 3.1% lower to $79.47. While the stock remains a long-term outperformer, it's recently hit a rough patch. In fact, Ambarella Inc is on track for its fourth straight daily loss -- during which it's lost a total of 17.5%. Not surprisingly, traders at the ISE, CBOE, and PHLX have been piling on the bearish bandwagon. AMBA's 10-day put/call volume ratio of 0.90 registers in the 79th percentile of its annual range. Further reflecting the Street's negative expectations, short interest accounts for 28.3% of the stock's float.

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