Bulls Think PTON Could Muscle Higher Ahead of Earnings

Peloton is set to report its fiscal second-quarter earnings after markets close tomorrow

Fitness concern Peloton Interactive Inc (NASDAQ:PTON) has been chugging quietly higher since coming under scrutiny for its holiday advertising tactics back in December, with solid support at the 60-day moving average emerging late that month. In fact, the equity is already up 21% year-to-date, with the stock looking to notch its eighth straight win today, just ahead of its fiscal second-quarter earnings report, slated for after the close tomorrow, Feb. 5. At last check, the equity is up 2.8% to trade at $34.30.

Optons traders are coming in hot ahead of PTON's earnings event. So far, 68,000 calls and 22,000 puts have crossed the tape -- three times what's typically seen at this point. By far, the most popular contract is the weekly 2/7 35-strike call, where positions are being opened. Positions are also being opened at the weekly 2/7 41-strike call and the 2/14 37-strike call, which may mean these traders are expecting more upside for Peloton.

During its only other report since going public, PTON shed 7.6% in the following session. This time around, the options pits are pricing in a 21.9% next-day swing for the equity, regardless of direction.

BMO chimed in before tomorrow's quarterly announcement, too, initiating coverage with a "market perform" rating, and a $27 price target. Coming into today, an overwhelming 20 of the 21 analysts in coverage considered PTON a "buy" or better, while its consensus 12-month price target sits at $35.84 -- just a slim 3% premium to current levels.