Bulls Blitz Pandora Media, Inc. (P) Ahead of Earnings

Pandora Media Inc (P) traders are buying May calls

by Griffin Kruse

Published on Apr 22, 2015 at 3:06 PM
Updated on Jun 24, 2020 at 10:16 AM

Pandora Media Inc (NYSE:P) is up 2% to $17.57, as the company prepares to deliver its first-quarter earnings tomorrow night. Accordingly, call activity in the options pits is ramping up, with some traders rolling the dice on near-term upside for the security.

Drilling down, P's May 17 call is garnering some interest today, with a significant amount of buy-to-open activity detected at the strike. By purchasing this call at a volume-weighted average price (VWAP) of $1.60, speculators anticipate P to muscle north of $18.60 (strike plus VWAP) by the close on Friday, May 15, when the front-month options expire.

Meanwhile, P has performed dismally on the earnings front over the past two years. Specifically, in the session immediately following its last eight earnings reports, P has lost an average of 10.8%, with the stock failing to notch a positive post-earnings move over that same time frame.

Elsewhere, short sellers have taken a shine to the security, as over 15% of its available float is sold short. It would take these bettors about five days to cover their positions, at average trading volumes. However, it appears some of these bears are starting to jump ship, as short interest declined 2.5% in the latest reporting period. The brokerage bunch has kept the faith, though, as 67% of covering analysts rate P a "buy" or "strong buy." 

On the charts, Pandora Media Inc (NYSE:P) has been a long-term underperformer, with the shares down 37.6% year-over-year. Nonetheless, the stock has managed to pare some of this deficit in recent weeks, with the shares up 21.2% since notching an annual low of $14.50 on March 11.  

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