Tag: 미국주식

Welcome to the ORATS earnings report where we scan for companies with upcoming earnings announcements, check out historical earnings information, and find a potential options trade. 

Read on or watch the video overview here: https://youtu.be/IDgR3FzONnI. 

Let’s start by running a scan on stocks reporting earnings this week, which includes the total option volume indicator, sorted from greatest to least.

Focusing on Micron Technology (MU), as we click through, we see this large-cap company in the semiconductors industry reports earnings on Thursday, June 30th, after the close.

The earnings and financials tab takes us to more detail showing the options market expecting a move of 7.3% in either direction. This move was breached in 4 out of the last 12 earnings.

During that time, the post-earnings move was outside of the implied range 6 times. In those cases, long straddles were profitable. The rest of the earnings moves likely yielded profitable short straddles. We can overlay quarterly financial data by clicking on the ratios below the earn move graph. Let’s look at the PE ratio, which is the stock price divided by the trailing twelve months earnings per share.

For MU, the current PE ratio is 6.4, which is 50.5% under the average for the last twelve earnings observations. Returning to the overview tab, we can quickly run a scan to find the best option trades. Since earnings are right around the corner, we scan for neutral strategies, then filter the scan results by S%, or smoothed edge, by setting it between negative and positive 3%.

This helps narrow the results to trades that are fairly priced. The highest ranked trade is a Iron Condor with strikes at 44, 50, 61, and 67, expiring on 2022-07-29, for a credit of $2.08.

By pulling up the trade, we can see the theoretical values in more detail. The distribution edge, found by the expected value of the payoff picture on the stock’s historical distribution, has an edge of 25.2%. The forecast edge, which is derived from historical volatility, has an edge of 20.9%. Lastly, the smoothed edge, which is calculated by drawing a best fit curve through the monthly implied volatilities, has an edge of 1.0%. The edge is relative to the mid-market price of the trade. Greater positive edges are a theoretical benefit to the trader. We can also look at the payoff graph. The probability of profit sums the probability of the nodes for the part of the payoff picture above the zero profit line over three standard deviations. For this trade the probability of profit is 72.98%. The reward to risk divides the max gain by the max loss. Here the 1 to 1.9 is the ratio of the max gain of $206 to the max loss of $-394. There are two break evens for this Iron Condor at 47.94 and 63.06. The total greeks and ThinkOrSwim code complete the information on the trade analysis popout.

Next, let’s look at this trade in the trade builder. Over the last month, the stock price fell 25.8%, while the thirty-day implied volatility rose 22.9%. The average slope of the trendlines is negative. The heatmap on the right side of the graph is green where volatility and slope are undervalued, and red where they are overvalued. In this case, short term IV and slope are neutral, while the long term is overvalued.

We can also see this trade overlaid on the monthly implied volatility graph in the chain tab. The legs for this trade are circled. For any questions or issues with the article, please contact otto@orats.com. To subscribe to the dashboard, please visit https://orats.com/dashboard

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Micron (MU) stock has been in a steady downtrend over the past year, falling some 30% in twelve months and down 40% year to date. The decline has been driven by a combination of factors. Aside from dealing with supply chain headwinds in a memory market that already highly volatile, the memory industry has been capitally intensive, posting commodity-like prices to match fluctuations in demand. 

The decline has also lagged both the tech sector and its peer group within semiconductors. The semiconductor giant is set to report third quarter fiscal 2022 earnings results after the closing bell Thursday. Micron last week received multiple analyst downgrades stemming from concerns about the near-term direction for consumer demand. Micron’s headwinds have been compounded by the fact that the Federal Reserve have been raising interest rates. 

While rising rate will serve to combat inflation, investors are worried of the effect of a recession, which could pressure demand for consumer PCs — a market that Micron relies on. Products for consumer devices accounts for 55% of Micron’s revenue in 2021. As such, rising interest rates pose a significant risk to Micron’s business. There is already evidence of declining demand for smartphones and PC sales. The latter declined 5% year-over-year in the Q1, according to market researcher IDC.

During the company’s investor day presentation in May, Micron management noted that consumer-focused segments of its business would drop by seventeen percentage points in the next three years. Meanwhile, the company expects its datacenter revenue to grow by twelve percentage points to 42%. While Micron is working to offset this risk by growing its datacenter business, the company on Thursday will need to issue strong guidance that instills confidence that memory pricing will remain solid until then.

For the quarter that ended May, the Boise, Idaho-based company is expected to earn $2.46 per share on revenue of $8.66 billion. This compares to the year-ago quarter when earnings came to $1.88 per share on revenue of $7.42 billion. For the full year, ending in August, earnings are projected to be $9.41 per share, up from $6.06 per share a year ago, while full-year revenue of $33.4 billion would rise 20.5% year-over-year.

The projected 20.5% and 55% rise in Micron’s full-year revenue and profits, respectively, suggests the stock has not been accurately judged. The company also has topped consensus revenue and profit estimates in eleven consecutive earnings reports, demonstrating a strong track record for execution. Micron’s NAND segment, which has grown amid the rise in datacenter demand, remains under-appreciated. That segment’s growth rate of 26.2% is trending higher than the company’s four-year projected average.

Elsewhere, the company is also benefiting from next-generation DRAM technology, known as DDR5. This transition will drive higher average selling prices which will enable margin expansion and higher earnings per share. This was already noticeable in the second quarter when Micron reported EPS of $2.14 per share on revenue of $7.79 billion, topping analysts’ forecast on both metrics. Consensus expected EPS of $1.98 per share on $7.53 billion in revenue. Gross margins, a closely watched measure, came in at 47.2%.

During the quarter, Micron generated $3.63 billion in operating cash flow, above the $3.06 billion it generated in the year-ago quarter. The company continues to take steps to mitigate the supply chain issues. Micron also issued EPS and revenue forecast for the just-ended quarters above Street estimates. Despite the near-term pricing headwinds and supply chain struggles, Micron continues to execute and remains well-positioned longer term. On Thursday, it must guide in a manner that suggests this level of confidence.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.