Shares of Fastly (FSLY) are down 2% at $9.85 at last check, trading at multi-week lows ahead of its fourth-quarter earnings release. Due out after the close today, Feb. 12, analysts are anticipating a breakeven result. FSLY is sitting just above its year-to-date breakeven level and struggling longer term, down 57% in the past 12 months. The equity has pulled back to a historically bullish signal, however, per historic data from Schaeffer’s Quantitative Analyst Rocky White.
Per White, FSLY has recently come within one standard deviation of its 50-day moving average, after spending a notable time above the trendline (defined as at least 80% of the time over the past two months and eight of the last 10 trading days). This signal has flashed four times in the past three years, with the stock averaging a one-month return of 17.8%, positive 75% of the time. From the equity’s current perch, a jump of this magnitude would put shares above $11.50 for the first time since December.
FSLY hosts a mediocre earnings history, finishing four of its past eight post-earnings sessions lower, averaging an 18% swing, regardless of direction. This time around, options traders are expecting a much larger 28.9% move.
There is ample room for upgrades, with 10 of the 11 covering brokerage firms sporting a tepid “hold” or worse recommendation. The security is also ripe for a short squeeze, with short interest accounting for 7.1% of its total available float.
Options traders are in luck as the stock’s Schaeffer’s Volatility Scorecard (SVS) ranks at 91 out of a possible 100. This suggests Fastly stock has tended to exceed options traders’ volatility expectations over the past 12 months — a boon for premium players.