Options traders are chiming in on the results
Shares of Petco Health and Wellness Company Inc (NASDAQ:WOOF) are 7% higher to trade at $2.74, but earlier was as high as $2.71 after the pet supply retailer’s fourth-quarter revenue beat Wall Street’s estimates. A major C-suite change happened, too, with CEO Ron Coughlin stepping down, and Michael Mohan taking point as interim.
In response to the event and update, WOOF’s typically quiet options pits are seeing an uptick in activity. So far, 1,321 calls and 899 puts have been traded so far — six times the intraday average. The most popular position is the March 3 put, followed by the 2.50 put from the same monthly series.
Over the last 10 weeks, options traders were much more bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Petco stock’s 50-day put/call volume ratio of 2.70 stands higher than 96% of readings from the past year. In other words, options traders have had an unusually healthy appetite for long puts of late.
Analysts have yet to chime in, but the sentiment heading into today was also pessimistic. Of the 14 in coverage, nine recommend a tepid “hold” rating.
On the charts, the equity is holding just above its Feb. 2 record low of $2.34. Most of the security’s recent runs higher have pushed into the 60-day moving average, a layer of resistance since November. The security is down more than 17.5% this year.