Spotify Stock Breaks Out After Surprise Earnings Beat

Analysts had estimated a third-quarter profit loss for Spotify

Managing Editor
Oct 28, 2019 at 9:53 AM
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The shares of Spotify Technology SA (NYSE:SPOT) are up 10% to trade at $132.90 this morning, on track for the best single-session gain ever. The media streaming name reported adjusted third-quarter earnings of 40 cents per share, blowing past the analyst estimates of a 31 cents per share loss. Revenue and premium subscribers also surpassed expectations, while the company announced CFO Barry McCarthy would retire in January.

Should today's results hold, it would be SPOT's fourth straight win, its longest winning streak since July. Spotify stock nabbed a record high of $161.38 on Aug. 1, but promptly collapsed within the next month, briefly dipping below the $112 region. After some consolidation in this area, the shares are now on track to topple their 50-day moving average for the first time since Aug. 19. 

The mood in the options pits heavily favors puts lately. Data at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Spotify stock's 10-day put/call volume ratio of 0.92, which ranks 2 percentage points from an annual high. While the ratio indicates calls outnumber puts on an absolute basis, the lofty ratio shows the heavy preference for puts.

Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.78 also ranks in the 93rd percentile of its 12-month range. In other words, short-term speculators are more put-heavy than usual toward SPOT.


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