BOX options data paints a very bullish picture
Cloud content management specialist Box Inc (NYSE:BOX) has rewarded investors with a huge rally in recent months, soaring from a March 2 nadir of $17.53 to a record high of $28.68 on May 10 -- an almost 64% advance in just over two months. The shares were last seen trading at $27.32 after yesterday bouncing near the 20-day moving average, and with the company scheduled to report earnings after the close next Wednesday, May 30, Raymond James is taking the opportunity to raise its outlook on the stock.
Specifically, the brokerage firm this morning boosted its BOX price target to $33 from $26, representing upside of nearly 21% from current levels. This is also well above the consensus 12-month price target of $26.64 from the other firms covering the equity. At the same time, eight of the 11 analysts that track the stock say it's a buy, and there are zero "sell" ratings. The security is also a favorite of tech investor Chamath Palihapitiya.
The dramatic rise in Box shares has grabbed the attention of short sellers, though. In just the last reporting period the number of shares sold short increased by 34.3%, now representing 8.6% of the total float. The 8.71 million shares currently held by short sellers is the most since September 2016.
As for options traders, they've remained very bullish on the tech concern. Almost 15,800 calls were bought to open during the past two weeks across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to just 4,355 puts. The June 29 call, now home to peak open interest, saw the largest increase in open interest during that time.
There was even buying at the June 35 call. This out-of-the-money contract is being asked at 10 cents, putting breakeven for bulls at $35.10 -- a 28.5% premium to the current stock price. It's worth noting, though, that BOX fell 23.3% the day after the company's last earnings release.