Analyst Update: Palo Alto Networks, Ambarella, CPI Card

Analysts revised their ratings and price targets on Palo Alto Networks Inc (PANW), Ambarella Inc (AMBA), and CPI Card Group Inc (PMTS)

May 12, 2016 at 3:09 PM
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Analysts are weighing in on security company Palo Alto Networks Inc (NYSE:PANW), video chip processor Ambarella Inc (NASDAQ:AMBA), and payment solutions stock CPI Card Group Inc (NASDAQ:PMTS). Here's a quick roundup of today's brokerage notes on PANW, AMBA, and PMTS.

  • PANW is down 6.4% at $130.57, following a price cut to $180 from $208 by Piper Jaffray, which cited signs of steeper-than-expected revenue growth deceleration in April. After hitting an annual low in mid-February, PANW shares staged a shaky recovery, only to run into a wall in the form of their formerly supportive 50-week moving average. PANW is now down 26.5% in 2016. Analysts are still largely positive toward the stock, with 25 of 27 rating Palo Alto Networks Inc a "buy" or better, without a "sell" rating in sight. Bearish sentiment has been growing in the options pits, though, as the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) sits at 1.46, which is in the 98th percentile of its annual range.

  • AMBA is down 6.7% at $35.67 -- and came within striking distance of its annual low, touched in February -- after Pacific Crest slashed its price target to $53 from $62. Since reaching an all-time high in July, the video chip processor stock has lost nearly three quarters of its value, as its watched shares of its biggest client, GoPro Inc (NASDAQ:GPRO), take a similar nosedive. Short interest on the stock is high, with 34.3% of AMBA's float sold short, and it would take 12.2 days of trading, at AMBA's average daily volume, to cover the 10 million shorted shares. Near-term options traders have been unusually call-biased towards the stock, with AMBA's Schaeffer's put/call open interest ratio (SOIR) sitting at 0.6, the lowest it's been within the past 12 months.

  • PMTS is down 46.5% at $4.10 -- and just off an all-time low of $3.97 -- after reporting lackluster earnings, unveiling a stock buyback plan, and warning that sales "will be significantly below our original expectations" for the remainder of the year. This announcement was met with a trio of negative analyst notes: Baird downgraded PMTS to "neutral" and cut the stock's price target to $4; CIBC downgraded the stock to "performer" and re-adjusted its price target to $8.50 from $12; and Goldman Sachs removed PMTS from its Americas Conviction Buy list, downgraded it to "neutral" from "buy," and more than halved its price target to $7 from $15. The stock has struggled since going public in the fourth quarter. CPI Card Group Inc's many short sellers will be pleased, though, with 8.1% of the stock's float sold short, an amount that would take traders 24.4 days – over a month of trading – to cover., at the equity's average pace of trading. Today, however, PMTS is on the short-sale restricted list. 

For other stocks in analysts' crosshairs, read Analyst Upgrades: Tesla Motors Inc, salesforce.com, inc, and Silver Wheaton Corp (USA) and Analyst Downgrades: General Electric Company, Infoblox Inc, and Michael Kors Holding Ltd.

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