Pinterest Options Pop as Stock Scales NYSE

Pinterest reported earnings and revenue that topped analyst forecasts

Deputy Editor
Jul 31, 2020 at 1:47 PM
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The shares of Pinterest Inc (NYSE:PINS) are taking off today, up 33.2% at $33.55 at last check and one of the best stocks on the New York Stock Exchange (NYSE). This breakout comes after the digital scrapbook platform announced narrower-than-expected fiscal first-quarter losses per share, as well as revenue above estimates --all thanks to a surge in users amid the pandemic. In response, three brokerages have upped their price target today -- including to $44 from $27 at RBC.

Today's pop has PINS trading at levels not seen in nearly a year and now up 79% since the start of 2020. The shares are on track to post their best single-session gain ever, and have now tripled off their March 18 lows near $10.

PINS July 31

The flurry of bull notes is no surprise, considering analysts looked hesitant coming into today, with only six of the 17 in coverage at a "buy" or better rating. Plus, the 12-month consensus target price of $24.27 is still at a 27.1% discount to current levels, indicating they are most likely the first pair in a round.  

This post-earnings rally has attracted plenty of attention in the options pits, as options volume is currently running at 11 times its usual rate. So far, 163,000 calls and 60,000 puts have crossed the tape, the most popular being the November 25 call, followed by the August 40 call -- where new positions are being opened. Buyers of the latter are banking on a sustained push from PINS in the coming month, when the contracts expire.

Also worth noting is Pinterest's Schaeffer's Volatility Scorecard (SVS), which sits p at 95 out of 100. In simpler terms, the stock has tended to exceed option traders' volatility expectations during the past year, a good thing for option buyers.


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