Travel Stock Pops After Earnings Beat

Call traders are targeting TRVG at a quicker-than-usual pace

Deputy Editor
Nov 1, 2021 at 10:22 AM
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Trivago NV (NASDAQ:TRVG) stock is up 10.6% to trade at $2.60 at last check, after the travel services name announced an upbeat third-quarter earnings report, citing increased travel as Covid-19 restrictions ease. The company reported profits of 2 cents per share, which is higher than analysts' estimated breakeven, as well as better-than-expected revenue. 

Today's pop has TRVG back above its 80-day moving average, a trendline that kept a cap on gains in October. Still firmly in penny stock territory, Trivago stock is up 113% year-over-year. 

Analysts are fully bearish on the stock, with three of the five in coverage carrying a tepid "hold," and two a "sell" or worse. Plus, the 12-month consensus price target of $3.03 is just a slim premium to current levels, and far below the stock's January high of $5.88. 

Trivago stock's typically quiet options pits are booming today. So far, 1,486 calls have crossed the tape, which is 20 times what's typically seen at this point, compared to just 38 puts. The November 2.50 call is the most popular by far. 

These options are reasonably priced at the moment, too. The stock's Schaeffer's Volatility Index (SVI) of 96% stands higher than just 10% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 

 

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