Analyst: Buy This Tech Stock Before Earnings

Workday earnings are due out next Thursday, Aug. 29

Aug 22, 2019 at 9:55 AM
facebook twitter linkedin

Mizuho Securities initiated coverage on Workday Inc (NASDAQ:WDAY) with a "buy" rating and a $225 price target -- a 17.8% premium to last night's close at $190.92. The brokerage firm said the company's cloud platform and prism analytics products could be "game-changers," potentially becoming $1 billion businesses.

Today's bull note comes ahead of the software company's second-quarter earnings report, due out next Thursday, Aug. 29, and echoes the broader trend seen among the brokerage bunch. Prior to today, 15 of 27 analyst maintained a "buy" or better rating on WDAY stock. Plus, the average 12-month price target of $212.91 is a healthy 11.5% premium to current trading levels.

The optimism is seen in the options pits, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Workday's 10-day call/put volume ratio of 1.56 ranks in the 71st annual percentile, meaning calls have been bought to open over puts at an accelerated clip.

Drilling down, the weekly 8/30 200-strike call has seen the largest increase in open interest over this two-week time frame, and data from the major options exchanges confirms mostly buy-to-open activity here. By doing so, call buyers are betting on Workday stock to break out above $200 by expiration at the close next Friday, Aug. 30.

Looking at the charts, WDAY shares charged higher off their late-November lows near $118, topping out at a record high of $226.83 on July 12. The tech stock pulled back from this milestone, but found a firm foothold atop its 200-day moving average. Today, the equity is up 0.4% at $191.61.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners