Medical Device Stock Near Bottom of Nasdaq After Failed Study

There's potential for downgrades and/or price-target cuts for XENT

Managing Editor
Oct 7, 2019 at 9:50 AM
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Near the bottom of the Nasdaq this morning sits Intersect ENT Inc (NASDAQ:XENT), down 11.3% to trade at $15.06. This comes after the medical device maker's drug-coated balloon treatment for sinus dilation failed its main goals in a study. 

This is pacing to be XENT's worst single-session drop since an earnings-induced bear gap on Aug. 2. The shares bounced from their two-year lows of $15.01 on Aug. 28, but the rebound was swiftly rejected by their 60-day moving average. Year-to-date, the equity is now down 45%. 

So far, no analysts have yet to come forward with any bearish adjustments. The door is wide open though, considering half rate XENT a "strong buy," with zero "sells" on the books. Plus, the consensus 12-month price target of $22 is a 54.4% premium to Friday's closing perch at $16.97.

Options traders have been heavily targeting calls. The security's 50-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is up to 13.61, putting it in the 82nd annual percentile.

Traders looking to speculate on XENT's short-term trajectory should consider options. The stock's Schaeffer's Volatility Index (SVI) of 66% is higher than just 18% of all other readings from the past year, suggesting near-term option contracts are attractively priced at the moment, from a volatility standpoint.

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