Put Traders Speculate on Sunnova Energy Stock Before Earnings

Sunnova Energy will step into the earnings confessional after tomorrow's close

Deputy Editor
Oct 25, 2022 at 12:55 PM
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The shares of Sunnova Energy International Inc (NYSE:NOVA) are 5.7% higher to trade at $14.36 today, just ahead of the solar concern's third-quarter financial report -- due out after the market's close tomorrow, Oct. 26. Put traders are taking advantage of the volatility, with 4,358 bearish bets crossing the tape halfway through the session, or triple the amount typically seen at this point. New positions are being opened at the top contract, the April 2023 7.50-strike call, as well as the January 2023 5-strike put.

Sunnova Energy is expected to post losses of 24 cents in the earnings confessional tomorrow, on revenue of $131.3 million. Options traders anticipate a post-earnings move of 18.1%, regardless of direction, which is nearly double the 9.9% swing the equity posted after earnings during the last two years. Further, over the last eight reports, NOVA moved higher in five instances, including a healthy 20.7% jump after its July results.  

Broadly speaking, this penchant for bearish bets is nothing new for Sunnova Energy stock speculators. Data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the security sports a 50-day put/call volume ratio of 1.93, which stands higher than 80% of readings from the past year. 

Analysts, meanwhile, hold a more optimistic outlook. Of the 15 brokerages covering NOVA, 12 say "strong buy," and there's not a single "sell" rating on the books.

After jumping above long-term pressure at its 160-day moving average, Sunnova stock moved back below the trendline and has traded below it for much of October. While the shares managed to add more than 6% in the last 6 months, they remain 38.3% lower in 2022. Looking further back, NOVA is 57.3% lower in the last 12 months.

NOVA Chart October 242022


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