Surging Dropbox Stock Attracts Options Bulls

No fewer than three analysts have lifted their price targets

Digital Content Manager
Feb 21, 2020 at 2:23 PM
facebook X logo linkedin


One of the top performers on the Nasdaq today is file sharing specialist Dropbox Inc (NASDAQ:DBX), which is bucking the broadmarket trend after posting fourth-quarter earnings and revenue that beat analysts' expectations, and lifting its 2024 operating margin target. The firm also announced a $600 million share buyback plan. At midday, DBX is trading at its highest level in six months, up 22% at $22.83.

The pop has also put DBX well atop familiar pressure at its 120-day moving average, for the first time since early August. Dropbox is still off 10.5% in the last 12-months, but now boasts a year-to-date gain of 27.9%. Plus, the equity is eyeing its biggest one-day percentage jump on record. 

DBX chart Feb 21

Today's news has inspired a handful of analysts to lift their price targets, including Deutsche Bank, which raised its estimate all the way to $30. This puts the consensus 12-month target price at $28.75 -- a 25% premium to current levels. Most members of the brokerage bunch were already bullish, with five of the seven in coverage calling DBX a "buy" or better. 

Options players have also been quite noisy. So far, 68,000 calls and 19,000 puts have exchanged hands, eight times what's typically seen at this point. The most popular contract is the weekly 3/6 25-strike call, and it appears that there may be some sell-to-open action happening here, per data from Trade Alert. The February 22.50 call is also seeing a lot of action, with positions being opened.

This rush towards calls hasn't been the norm, however. In fact, during the last 10 days, 1.11 puts were bought for every call at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all but 1% of readings from the past year, indicating a much healthier appetite for long puts of late. 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI