by Ian Harvey
April 02, 2018
Options Trades to Consider Based on Expected Earnings Reports:
Monday, April 02
Switch Inc (NYSE:
SWCH), a developer
and operator of the SUPERNAP data center facilities and provides colocation,
telecommunications, cloud services, and content ecosystems, will report
earnings after the market closes. The consensus estimate is
for a loss of $0.22 per share on revenue of $99.55 million. The Earnings
Whisper number is for ($0.20) per share.
Overall earnings estimates have been revised higher since the company's
last earnings release.
The stock currently has an average rating of “Hold” and an average price
target of $21.83.
Option trade to consider: Buy the SWCH APRIL 20 2018 16.000 CALL at approximately $0.80.
Tuesday, April 03
Dave & Buster's Entertainment Inc (NASDAQ: PLAY), an American restaurant and entertainment business headquartered in Dallas, will report earnings after the market closes.
The consensus earnings estimate is $0.61 per share on revenue of $304.59 million. The Earnings Whisper number is for $0.64 per share. Consensus estimates are for earnings to decline year-over-year by 3.17% with revenue increasing by 12.74%.
Dave & Buster's stock has trailed the market since the entertainment chain revealed weakening traffic trends in early January. Rather than speeding up during the seasonally strong holiday weeks, comparable-store sales worsened from the third-quarter's 1.3% decline, to fall by 5% early in the fourth quarter. As a result, CEO Steve King and his management team now believe comps will be slightly negative for the full 2017 year. Dave & Buster's also lowered its profit forecast to between $108 million and $110 million compared to $91 million in 2016.
Short interest has increased by 23.7% since the company's last earnings release. Also, overall earnings estimates have been revised lower.
Option trade to consider: Buy the PLAY APRIL 20 2018 40.000 PUT at approximately $1.75.
Wednesday, April 04
CarMax, Inc (NYSE: KMX), the United States' largest used-car retailer, will report earnings
before the market opens.
The consensus earnings estimate is $0.89 per share on
revenue of $4.23 billion. The Earnings Whisper number is for $0.91 per share. Consensus
estimates are for year-over-year earnings growth of 9.88% with revenue
increasing by 4.45%.
CarMax has struggled of late. Rising interest rates
have raised concerns that default rates might follow. Fiscal Q3 results in
December disappointed, with same-store unit growth below Street expectations.
Revenue growth slowed in each of the last two quarters
and fell below 3% in its most recent report.
Short interest has increased by 21.3% since the company's last earnings
Option trade to consider: Buy the KME APRIL 20 2018 60.000 PUT at approximately $1.60.
Acuity Brands, Inc. (NYSE: AYI), a lighting manufacturing
company, will report earnings before the market opens. The consensus earnings
estimate is $2.03 per share on revenue of $807.16 million. The Earnings Whisper
number is for $1.99 per share. Consensus estimates are for year-over-year
earnings growth of 14.04% with revenue increasing by 0.31%.
Short interest has increased by 5.8% since the company's last earnings
release. As well, overall earnings estimates have been revised lower.
Acuity Brands was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued on Tuesday, March 13th.
According to Zacks, “Shares of Acuity Brands lost 15.3% in the last six months, more than its industry's loss of 14.3%. Earnings estimates for the current quarter and the year have remained unchanged over the last 30 days, limiting upside potential for the stock. Acuity Brands operates in a highly competitive industry that is affected by volatility owing to a number of general business and economic factors. Higher spending on research and development of energy efficient lighting products dent margins and thereby the bottom line of the company. Gross profit margin in the fourth quarter decreased 80 basis points year over year owing to the lower-than-expected sales volume. Again, increased volatility, higher costs, reliance on one client and escalating interest/mortgage rates might weigh on the stock.”
Option trade to consider: Buy the AYI APRIL 20 2018 135.000 PUT at approximately $4.50.
Thursday, April 05
Conn's Inc (NASDAQ: CONN), an electronics retailer, will report earnings before the market opens. Analysts forecast earnings of $0.54 per share, versus a loss of $0.05 during the same period last year. The Earnings Whisper number is for $0.61 per share.
After years of earnings declines, CONN is moving in the right direction. Earnings are expected to rise 522% during the current year, and over the next five years analysts expect 23.0% per annum growth.
The company has a solid earnings track record, posting big earnings surprises each of the last six quarters. Revenue was also better than expected last quarter after missing estimates for two straight quarters. CONN has been stuck in a fairly tight sideways trend for the last three months, but analysts continue to see a lot of upside in the stock.
CONN shares are down 6.3% on the year.
Of the four analysts who cover the stock, three rate it a “strong buy”, and one rates it a “hold”.
Option trade to consider: Buy the CONN APRIL 20 2018 35.000 CALL at approximately $2.10.
An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
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