Analyst Downgrades: Ambarella Inc, NRG Energy Inc, and Zumiez Inc.

Analysts downwardly revised their ratings on Ambarella Inc (AMBA), NRG Energy Inc (NRG), and Zumiez Inc. (ZUMZ)

by Alex Eppstein

Published on Dec 1, 2015 at 9:48 AM

Analysts are weighing in on semiconductor maker Ambarella Inc (NASDAQ:AMBA), power company NRG Energy Inc (NYSE:NRG), and apparel peddler Zumiez Inc. (NASDAQ:ZUMZ). Here's a quick roundup of today's bearish brokerage notes on AMBA, NRG, and ZUMZ.

  • Deutsche Bank cut its price target on AMBA to $70 from $85. The downward revision is well-deserved, as the stock has fallen hard since touching a record high of $129.19 in late July, though it was last seen 2.7% higher at $64.53. On the fundamental front, Ambarella Inc will report third-quarter earnings on Thursday evening. Ahead of the event, short sellers have been upping the bearish ante. During the most recent two-week reporting period, short interest on AMBA rose 6.2%, and now represents 45.8% of the stock's total float. At typical trading levels, it would take over one week to buy back these positions.
  • NRG has lost over half its value on a year-to-date basis, and touched a record low of $11.51 yesterday. At last check, the stock is flat at $12.36, even though Citigroup initiated coverage with a "sell" rating and an $11 price target. Speaking more generally, though, the brokerage crowd has taken a sunny-side-up approach toward NRG Energy Inc. Eighty percent of covering analysts have handed out "buy" or better opinions, and the security's consensus 12-month price target of $23.31 sits at a nearly 90% premium to current levels.
  • ZUMZ, which is slated to report earnings Thursday night, is off 1.1% this morning at $14.93, following a downgrade to "market perform" at William Blair. This is business as usual for a stock that had given up three-fifths of its value year-to-date heading into today's session. Amid this long-term swoon, short sellers have been active. Nearly 20% of Zumiez Inc.'s float is sold short, representing two weeks' worth of trading activity, given typical volumes. Also, short-term traders have shown a distinct preference toward puts over calls. ZUMZ's Schaeffer's put/call open interest ratio (SOIR) of 1.07 ranks in the 79th percentile of its annual range.

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