The shares have more than quadrupled off their March lows
The shares of Etsy Inc (NASDAQ:ETSY) are down 0.7% at $125.76 this afternoon, despite hitting an all-time-high of $129.70 earlier today. The volatile price action comes just a day ahead of the company's second-quarter earnings report, due after the close on Wednesday, August 5. Below, we will take a look at how the stock has performed on the charts of late, and explore some of the options activity surrounding ETSY ahead of the event.
Digging deeper, the equity has completely recovered from its mid-March lows near the $29 level, more than quadrupling in value. The security has been breaking record highs on a monthly basis since May, guided upwards by the stock's supportive 40-day moving average over the past several months. Longer term, ETSY sports a 183.5% lead in 2020.
Analysts are majorly optimistic toward the equity. Of the 15 in coverage, 12 sport a "buy" or better rating, while the remaining three carry a tepid "hold" or worse. Meanwhile, the stock's 12-month consensus target price of $107.88 is a 14.4% discount to current levels, suggesting a slew of bull notes could be in order should the e-tailer's corporate report exceed expectations.
That upbeat sentiment rings true in the options pits, where calls are overwhelming puts. In fact, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), data shows 13,716 calls were were exchanged in the past 10 days, as opposed to a mere 3,675 puts. Also worth noting is the security's Schaeffer's Volatility Scorecard (SVS), which sits high at 93 out of 100. In other words, Etsy stock has tended to exceed option traders' volatility expectations during the past year, a good thing for option buyers.
Lastly, a look at the equity's history of post-earnings reactions over the past two years shows a mixed response. During its last eight reports, half of these next-day sessions were higher, while the other half was lower, including a 23.7% jump in November 2018 and a 15.7% drop in October 2019. The security averaged a post-earnings swing of 12.3% the last eight quarters, regardless of direction. This time around, the options market is pricing in a much bigger move of 17%.