The shares are exploring record highs after earnings
Adobe Systems Incorporated (NASDAQ:ADBE stock is surging today, up 3.8% to trade at $227.25 -- and just off a new record high of $228 -- after the software company reported fiscal first-quarter earnings and revenue above expectations. In response, analysts have heaped praise on ADBE, with no fewer than 11 brokerages upping their price targets, including to $263 from $235 at Jefferies. One analyst at Canaccord Genuity noted that "you have to work hard to poke holes in the Adobe story," hiking their price target on the shares to $245 from $220.
Adobe stock is now on track for its fifth straight weekly win. The shares have added nearly 30% in 2018, and have been guided higher by their rising 10- and 20-week moving averages since January 2017.
It's no surprise, then, that options traders have displayed heightened bullish tendencies of late. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 1.71, which ranks in the 90th percentile of its annual range. This indicates options buyers picked up Adobe calls over puts at a much faster-than-usual pace ahead of earnings.
Furthermore, the equity's Schaeffer's Volatility Scorecard (SVS) stands at 84 out of 100. This indicates that the options market has consistently underpriced the shares' ability to make big moves during the past 12 months.