Analyst Update: El Pollo LoCo, Cardiovascular Systems

Analysts adjusted their ratings on El Pollo LoCo Holdings Inc (NASDAQ:LOCO), Cardiovascular Systems Inc (NASDAQ:CSII), and Qualys Inc (NASDAQ:QLYS)

Josh Selway

Oct 8, 2015 at 1:55 PM

Analysts are weighing in today on chicken fanatic El Pollo LoCo Holdings Inc (NASDAQ:LOCO), medical concern Cardiovascular Systems Inc (NASDAQ:CSII), and network security provider Qualys Inc (NASDAQ:QLYS). Here's a quick roundup of today's brokerage notes on LOCO, CSII, and QLYS.

It's been a rough few months for LOCO. The stock has underperformed the S&P 500 Index (SPX) by more than 39 percentage points during the past three months, and hit an all-time low of $10.16 just last Friday. Today, however, the shares have shot 8.6% higher to $12.02, thanks to a fresh "buy" rating at SunTrust Robinson, which waxed optimistic on LOCO's unique positioning of higher-quality and healthier food. This mirrors the general opinion on the Street, where 80% of brokerage firms say El Pollo LoCo Holdings Inc is a "strong buy." However, LOCO isn't out of the clear yet. Today's upside momentum has stalled in the face of the equity's 40-day moving average. This trendline blocked the stock's breakout attempt in early August, and hasn't been topped on a closing basis since mid-May.

After hitting a nearly three-year low of $11.80 earlier, CSII was last seen 19.4% lower at $13.40. Weighing on the stock is a flurry of negative brokerage attention, following the company's weak current-quarter outlook. Most notably, Leerink downgraded Cardiovascular Systems Inc to "market perform" from "outperform," while seriously slashing its price target to $17 from $45. BofA-Merrill Lynch also weighed in, downgrading CSII to "underperform" from "buy" and slicing its target to $15. This may be the development short sellers have been waiting for. Short interest has grown over 28% since the beginning of June, and it would now take more than two weeks for bears to buy back their bets, at the stock's normal daily volumes.

QLYS scored an upgrade to "outperform" from "neutral" at Credit Suisse, pushing the shares 5% higher to $32.62. The brokerage firm also raised its price target by $10 to $45, and said QLYS is "well positioned to defend and expand its leadership in the growing security-as-a-service market." The upbeat attention has overshadowed a price-target cut to $37 from $44 at RBC last night. In the options pits, Qualys Inc's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.27 is higher than 93% of all readings from the past year. In short, put buying has been way more popular than usual in recent weeks.

For other stocks in analysts' crosshairs, read Analyst Upgrades: VeriFone Systems Inc, Visa Inc, and Zumiez Inc. and Analyst Downgrades: Groupon Inc, Statoil ASA, and Blackstone Group LP.

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