Earnings Reaction Sends Snap Stock Above IPO Price

Snap hasn't traded north of $17 since July

by Karee Venema

Published on Feb 7, 2018 at 9:41 AM
Updated on Feb 8, 2018 at 9:05 AM

Shares of Snap Inc (NYSE:SNAP) have surged 22.5% out of the gate to trade at $17.24, lifting fellow social media stock Twitter (TWTR) along with it. The Snapchat parent reported better-than-expected fiscal third-quarter revenue of $285.7 million, and said its daily active users jumped 18% year-over-year to 187 million -- more than analysts were expecting. The company's adjusted quarterly loss of 13 cents per share was also narrower than the consensus estimate.

Wall Street has been quick to chime in on Snap's earnings. While J.P. Morgan Securities upgraded the stock to "neutral" from "overweight," RBC raised its rating to "outperform" from "sector perform." The latter brokerage firm also boosted its price target to $21 from $15 -- in territory not charted since last May.

Heading into today's session, SNAP stock had been lagging on the charts -- down almost 40% over the past nine months. What's more, the equity's rally off its mid-November lows near $12.25 was quickly contained by the newly formed 180-day moving average. However, today's surge has Snap shares trading north of their $17 initial public offering price (IPO) for the first time since July.

Nevertheless, Snap put options were pricing in remarkably low volatility expectations relative to their call counterparts. At last night's close, the equity's 30-day implied volatility skew of negative 21.3% was ranked lower than 99% of all comparable readings taken in the past year.

 

 

Bernie Schaeffer's
CHART OF THE WEEK

Catch up with Bernie and his unique insights on a stock, sector, index, or indicator that's captured his attention- Yours FREE and delivered every Sunday!


MORE | MARKETstories


Stocks Wrap Up Best Week in Years
The Dow pared its gains after the U.S. indictment of Russian nationals
Home Depot Stock Call Volume Spikes Ahead of Earnings
The retailer will report earnings ahead of Tuesday's open
VIX Sinks as Stocks Stage Best Comeback in Years
The market's "fear gauge" is on track for its biggest weekly loss since November 2016
3 Drug Stocks Making Outsized Moves
Pacira Pharmaceuticals stock is near the bottom of the Nasdaq

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

TRADING SERVICES | FEATUREDproducts


By MG 2016
In March of 2016, I was introduced to Expiration Week Countdown.  The results are better than words!
Options trading made simple.
Schaeffer's Investment Research, Inc. is dedicated to providing subscribers advantages in options trading and investing.  Our independent market research services create profitable opportunities for investors at every level.