3 Stocks Soaring After Earnings

A short squeeze could add fuel to WTW stock's fire

Managing Editor
Aug 4, 2017 at 10:17 AM
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Analysts are weighing in on online review concern Yelp Inc (NYSE:YELP), Oprah-endorsed dieting specialist Weight Watchers International, Inc. (NYSE:WTW), and mobile camera maker GoPro Inc (NASDAQ:GPRO), all of which just reported earnings. Here's a quick roundup of today's bullish brokerage notes on shares of YELP, WTW, and GPRO.

Yelp Stock Climbing After Revenue Beat, GrubHub Sale

Yelp stock is up 26% to trade at $39.56, after the online review company reported second-quarter revenue that exceeded estimates. In addition, it was announced that Yelp would sell its Eat24 component to GrubHub for $287.5 million in cash. The double dosage of good news has helped YELP stock erase its mid-May bear gap, and the shares are on pace for their highest close since their February bear gap. No fewer than nine analysts raised their price targets after earnings, including to $46 from $37 at J.P. Morgan Securities.

In the options pits, traders have been pessimistic lately. YELP stock has an International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) 10-day put/call volume ratio of 3.84, which ranks 1 percentage point from an annual high. An unwinding of these bearish bets could push YELP stock even higher.

Weight Watchers Stock Through The Roof After Raised Guidance

Weight Watchers stock is up 24.8% to trade at $41.30, and just touched a three-year high of $41.60, after the dieting specialist reported profit and sales that beat expectations, and raised its earnings outlook for the rest of 2017. As a result, Craig Hallum raised its price target by 56%, to $50 from $32 -- in territory not charted since early 2013. It's been a banner year for WTW stock, which has added a whopping 264% year-over-year.

Despite short interest decreasing by 4% during the last reporting period, roughly 8.2 million shares of WTW are sold short, accounting for 30% of the stock's total available float. At WTW's average daily trading volume, it would take more than 10 sessions to repurchase all of those pessimistic positions. A continued short squeeze could send WTW stock to new heights. 

Option Buyers Cheer as GoPro Stock Sizzles

GoPro stock is up 15.1% to trade at $9.51, after the tech company reported a slimmer-than-expected second-quarter loss and offered solid current-quarter guidance. As a result, Raymond James raised its outlook on GPRO to "market perform" from "underperform," and Longbow Research upgraded the shares to "neutral" from "underperform." In addition, Wedbush raised its price target to $10 from $9. The surge today takes GPRO shares past their 200-day moving average for the first time since November 2016. 

In the options pits, traders were quite call-biased toward GoPro stock ahead of earnings. ISE/CBOE/PHLX data shows GPRO sports a 10-day call/put volume ratio of 2.72, which ranks in the 93rd percentile of its annual range.  

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