Analyst Targets 154% Upside for Zogenix Stock

Tesla, meanwhile, is sinking on a number of fundamental woes

by Karee Venema

Published on Sep 7, 2018 at 12:48 PM
Updated on Sep 7, 2018 at 12:58 PM

Major U.S. benchmarks have swung lower, as traders weigh this morning's jobs data against a rebound in the tech sector. Among individual stocks making volatile moves are electric carmaker Tesla Inc (NASDAQ:TSLA), cybersecurity name Palo Alto Networks Inc (NYSE:PANW), and central nervous system specialist Zogenix, Inc. (NASDAQ:ZGNX). Here's a quick look at what's moving shares of TSLA, PANW, and ZGNX.

Tesla Options Hot as Musk Video Goes Viral

Tesla stock is spiraling today, following news of executive departures. Specifically, the company's head of human resources, Gaby Toledano, is leaving, which follows reports that Chief Accounting Officer Dave Morton resigned Tuesday after just one month on the job. Additionally, a video is making the rounds of Tesla CEO Elon Musk smoking marijuana on a podcast with Joe Rogan. At last check, TSLA stock is down 5.3% at $266.10, on track for its lowest close since early April.

What's more, Tesla is headed for its eighth loss in nine days, and has shed almost 32% since Musk's go-private tweet sent the shares to a roughly 11-month high of $387.46 about five weeks ago. At this rate, the stock is pacing for its worst quarter ever, down 23.7% so far.

Options traders, meanwhile, are blasting Tesla today, with around 141,000 calls and 135,000 puts on the tape -- three times what's typically seen at this point in the day, and volume pacing in the 100th annual percentile. Day traders are present, with strikes in the weekly 9/7 series accounting for 17 of TSLA's 20 most active options.

Palo Alto Networks Stock Hits Record High After Earnings

Palo Alto Networks last night reported an adjusted fiscal fourth-quarter profit of $1.28 per share on $658.1 million in revenue, higher than analysts were expecting, and gave upbeat current-quarter guidance. The results were met with an onslaught of price-target hikes, including one to $282 from $239 at J.P. Morgan Securities -- a nearly 28% premium to last night's close.

In reaction, PANW stock is trading up 5.7% at $232.87, earlier hitting a record high of $234.35. This is just more of the same for an equity that's up 60.5% year-to-date, and has surged 20% since bouncing off its 120-day moving average in late July.

Bulls appear to be targeting even more upside by tonight's close. Call volume has surged to seven times the intraday average today, with speculators seemingly buying to open the weekly 9/7 235-strike call for a volume-weighted average price $0.98. If this is the case, breakeven for the call buyers at 4 p.m. ET tonight is $235.98 (strike plus premium paid).

Bull Note Has ZGNX Stock Bouncing from 120-Day Trendline

B. Riley FBR initiated coverage on Zogenix with a "buy" rating and $116 price target -- a 154% premium to last night's close -- waxing optimistic over growth opportunity for the company's seizure drug, ZX008. ZGNX stock is up 4.9% to trade at $47.90, extending yesterday's bounce off its 120-day moving average.

More broadly, ZGNX shares have added 19.6% so far in 2018, and short sellers are starting to cover. Short interest fell almost 10% in the two most recent reporting periods, yet the 4.5 million ZGNX shares still sold short account for a lofty 18.4% of the stock's available float, or 4.5 times the average daily pace of trading. Continued covering could create bigger tailwinds for Zogenix.

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