Cloud stock Snowflake Inc (NYSE:SNOW) is attracting bull notes ahead of the company's fourth-quarter earnings report, due out after the close on Wednesday, Feb. 28. Both Jefferies and D.A. Davidson hiked their price targets to $265 and $260 from $230 and $220, respectively. At last check, SNOW is up 1% at $231.58.
The shares are a chip shot from its Feb. 12, 52-week high of $237.71, with support from the 30-day moving average containing last week's pullback. Snowflake stock sports a 16.5% lead for 2024, and have added more than 55% over the past 12 months.
However, SNOW doesn't usually perform well after reporting quarterly results. The stock has finished five of the past eight next-day sessions lower -- including a 16.5% dip in May -- though the most recent report in November yielded a 7% gain. The shares average a move of 11.5% in the past two years, regardless of direction, but the options pits are pricing in a larger-than-usual swing of 15.7% this time.
Call traders are betting bullishly. The security's 50-day call/put volume ratio of 2.80 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 97% of readings from the past year. This means options traders have been much more bullish than usual.
Echoing this, SNOW's Schaeffer's put/call open interest ratio (SOIR) of 0.62 stands higher than only 1% of annual reading. In other words, short-term traders also lean bullish toward the stock.
A premium-selling strategy could be the move ahead or after the event. SNOW's Schaeffer's Volatility Scorecard (SVS), checks in at a 1 (out of 100.) In other words, the security has consistently realized lower volatility than its options have priced in
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