Citrix, QUALCOMM, Himax Technologies Earnings Roundup

CTXS, QCOM, and HIMX are on the move after earnings

Jan 26, 2017 at 12:23 PM
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As the broader market continues its rally into record-high territory, traders are digesting a hefty round of earnings results. Among the names in focus today are tech stocks Citrix Systems, Inc. (NASDAQ:CTXS), QUALCOMM, Inc. (NASDAQ:QCOM), and Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). Below, we'll take a look at how traders and analysts are reacting to the latest quarterly figures from CTXS, QCOM, and HIMX.

Citrix Slides on Outlook

Networking specialist CTXS is down 6.5% at $89.52, after the company's earnings and revenue beat expectations, but its full-year outlook came up short. The stock had been on an uptrend since its February lows south of $61, and hit a 16-year high of $95.90 on Wednesday. The shares have so far received a pair of price-target adjustments -- Citigroup cut its target to $113 from $116, while UBS raised its price target to $86 from $84. Analysts have been relatively bearish toward CTXS in general, with 10 out of 16 maintaining a "hold" or worse recommendation.

Short interest on CTXS dropped significantly during the two most recent reporting periods, but still accounts for one week's worth of purchasing power, at the stock's typical pace of trading. Some of these bears may have hedged against a potential post-earnings breakout, using protective calls. CTXS' 10-week call/put volume ratio of 1.69 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 86th percentile of its annual range -- though volume is light on an absolute basis. Citrix Systems, Inc. options are on fire today, trading at 24 times the expected intraday rate, with call volume on pace for a 52-week high, thanks largely to a potential credit spread at the March 95 and 97.50 strikes, per ISE data.

Legal Drama Weighs on QUALCOMM

Semiconductor stock QCOM has dropped 5.1% to $54.02, with legal woes from Apple Inc. (NASDAQ:AAPL) and the Federal Trade Commission (FTC), as well as weaker-than-expected revenue growth, overshadowing a slight earnings beat. The stock has been subject to at least seven price-target cuts so far, with BMO, Morgan Stanley, and RBC setting their new targets the lowest, at $60. The shares were rejected at the 320-day moving average yesterday, and appear to be testing support in the $54 region, which has alternately served as support and resistance since August 2015.

QCOM has seen a notable drop in short interest over the past few months -- down 50% since mid-October, to be specific. But that doesn't mean all traders are confident. In fact, QUALCOMM, Inc. saw notable put buying ahead of earnings on Wednesday. And, according to Trade-Alert, one former bull sold 16,000 March 60 calls to buy a matching number of March 50 puts, in a risk-reversal tied to 688,000 shares. That said, QCOM calls are hot today, trading at six times the usual intraday rate, with call volume running in the 99th percentile of its annual range.

Himax Volatile Following Preliminary Earnings

It's been a choppy session so far for chipmaker HIMX, which came within a penny of Monday's three-year low earlier, but was last seen up 3% at $5.57. The gains are somewhat surprising, as the company's preliminary earnings were underwhelming, negatively impacted by a $12 million one-time inventory write-down. The stock has been sliding since late September, with the 10- and 20-day moving averages adding pressure of late.

Short interest on HIMX has fallen by more than 50% since early October, despite an uptick during the most recent reporting period. Giving the stock's technical slump, it's reasonable to assume shorts have been busy collecting profits -- but the covering activity hasn't boosted the shares. Meanwhile, short-term puts have been popular. Himax Technologies, Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 1.29 is seated at an annual high. Plus, the stock's gamma-weighted SOIR of 2.68 indicates short-term puts nearly triple calls among near-the-money strikes.

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