iRobot Stock Plummets Despite Top-Line Beat

Options traders are targeting the stock at full speed

Assistant Editor
May 4, 2021 at 10:10 AM
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The shares of iRobot Corporation (NASDAQ:IRBT) are taking a nosedive on the charts today. This comes despite the vacuum maker reporting first-quarter earnings of 41 cents on $303.26 million in revenue -- much better than analysts' anticipated nine cents on $264.05 million. Rising costs are instead putting pressure on the stock, as the company reaffirmed its full-year forecast to account for the semiconductor chip shortage, as well as higher-than-expected raw material, freight, and transportation prices. 

At last check, IRBT was down 11.7% to trade at $91.75, on track for its worst day since Jan. 28. This bear gap has IRBT dropping below a slew of long-term moving averages, including the 200-day trendline, which is in danger of being breached for the first time on a closing basis since April 2020. Even though its track for its sixth-straight loss, the equity is still up around 13.7% year-to-date. 

The silver lining is that analysts have not stepped forward with price-target cuts. That's probably because the brokerage bunch is mostly bearish on iRobot stock. Of the six in coverage, five carry a "hold" or worse rating, with only one "strong buy." 

The options pits, on the other hand, have been more optimistic. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), IRBT sports a 50-day call/put volume ratio of 2.03. This ratio stands higher than 84% of readings from this past year, indicating a stronger-than-usual penchant for long calls. 

Today, options traders have been quick to chime in on iRobot stock. So far, 2,504 calls and 1,964 puts have crossed the tape, which is 10 times what's typically seen at this point. The weekly 5/7 90-strike put is the most popular, followed by the 110-strike call in the same session, with new positions being opened at the latter. 

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