Shopify will announce its results for the first quarter after trading closes on Wednesday
E-tail name Shopify Inc (NYSE: SHOP) is ready to release first quarter results ahead of the opening on Wednesday April 28th, and several members of the brokerage group are signing up ahead of the event. In particular, Baird and CIBC have lowered their price targets to $ 1,550 and $ 1,325, respectively. Even so, SHOP is up 4.4% to trade at $ 1,147.46 this afternoon.
Part of this positive price move could be due to the SHOP’s rebound from the 200-day moving average – an area of support that equity has only briefly breached in recent years. The stock is facing recent pressures on its 20-day moving average, however, and SHOP has lost around 23% since its all-time high in mid-February, just below the $ 1,500 level.
Back to analyst sentiment: it looks like the brokerage group is split into Shopify stocks. Of the 21 that cover equity, 14 call it a “strong buy”, 11 say “hold”, and a single wolf regards the name of online retailing as a “sell”.
Options traders were now mostly optimistic. In fact, SHOP has a 10-day call / put volume ratio of 2.30 on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE), and the NASDAQ OMX PHLX (PHLX), which is over 95% of the readings of is the past year. This means that calls are answered much faster than usual.
Despite the upcoming earnings report, options traders still expect relatively low volatility expectations for Shopify. This corresponds to SHOP’s Schaeffer volatility index (SVI) of 49%, which is over 10% of the measured values for the last 12 months.
If you dig deeper, it looks like these traders are pricing in a 10.7% post-earnings swing for the stock this time around, which is slightly larger than the 6.1% average the SHOP has over the past eight Averaged sessions the next day regardless of direction. In retrospect, the day after its quarterly reports, the stock has had a largely positive return for the past two years, even though the last two returns have been lower.