Palo Alto Stock Picks Up After Strong Results

Options volume is running at six times the intraday average amount

Deputy Editor
Nov 18, 2022 at 11:28 AM
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Palo Alto Networks Inc (NASDAQ:PANW) is surging after its fiscal first-quarter earnings beat and raise, up 9.4% at $171.33 at last glance. No fewer than six analysts lifted their price targets in response, including Oppenheimer to $220 from $200, while Credit Suisse and Wolfe Research threw in a small price-target cuts to $225. The analysts in coverage Morgan Stanley, which holds an "overweight" rating and $268 price target, stated that Palo Alto "will be the first $100 billion market cap company in cybersecurity, or nearly double its current share price in two years."

PANW is trending on StockTwits after the event, with options traders traders targeting the equity at full force. So far, 56,000 calls and 29,000 puts have crossed the tape, which is six  times the average intraday volume. The November 175 call is the most popular, followed by the November 160 put. 

It's also worth noting that short interest makes up 7.4% of the stock's available float. It would take over five days to buy back these bearish bets, at PANW's average pace of trading. 

Lastly, short-term options traders have been overwhelmingly pessimistic on PANW. This is per its Schaeffer's put/call open interest ratio (SOIR) 1.68, which ranks higher than 84% of readings from the past year. An unwinding of these bearish bets could support an even bigger surge in the shares.


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