Analyst: This Penny Stock Could Surge 80%

Call buyers have blasted TEUM stock in recent weeks

Apr 26, 2019 at 1:31 PM
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Oppenheimer initiated coverage on Pareteum Corp (NASDAQ:TEUM) with an "outperform" rating and $7 price target -- an 80% premium to last night's close. Analyst Timothy Horan waxed optimistic on the mobile networking software and services provider's "very strong" backlog growth, and is in a position to increase revenues by 30% in the next five years, and potentially double its EBITDA margins.

This bullish analyst attention is just more of the same for the tech stock, with 100% of covering brokerages maintaining a "buy" or better rating. Plus, the average 12-month price target sits all the way up at $7.58 -- territory not charted since late 2015.

Options traders are upbeat, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TEUM's 10-day call/put volume ratio is docked at a top-heavy 16.19. The May 5 call, specifically, has seen one of the biggest increases in open interest over this time frame, and data from the major options exchanges confirms significant buy-to-open activity here.

While some of this activity may be at the hands of traditional bulls, it's also possible short sellers are initiating an options hedge against any upside risk. Short interest shot up 62% in the two most recent reporting periods to 13.7 million shares. This accounts for 13.6% of TEUM's available float.

Looking at the charts, the last time Pareteum stock closed north of $5 was in late March, and it remains well off its March 19 nearly three-year high of $5.93. Today's bull note is giving a lift to the shares -- up 4.9% at $4.08 -- but the rally is being contained by the 50-day moving average, which has kept a lid on TEUM since mid-April.

teum stock price chart on april 26


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