DKS | Alphatica Earnings Risk Signal
Dick's Sporting Goods reports tomorrow pre-market. Here's what the signal sees.
IV Spread: +4.15%. Calls at 80.77% vs puts at 76.61%. Calls are more expensive. The options market is paying up for upside heading into the print. Bullish lean.
That's notable given the last earnings. DKS missed by -23.6% last quarter. The stock barely moved — 0.20% PMIE on a 24% miss. The market shrugged off a massive whiff. Either expectations were already rock bottom or someone knew the miss was priced.
Expected move: 8.43% ($16.49). Street estimate: $3.43 EPS.
The 3-year PMIE average is 6.87% — meaning the options market is pricing a larger move than history suggests. EVRP at +58.71% confirms it — implied vol is nearly 4x realized vol. Options are expensive relative to how this stock has actually been moving.
The range on past moves is wide: 0.20% to 24.15%. DKS can be a rock or a rocket on earnings. No consistency. Last four quarters: 0.20%, 4.84%, 4.19%, 1.91%. Recent history says smaller moves. The 24% outlier was two years ago.
The read: bullish IV skew, expensive options relative to realized vol, and a stock that barely moved on a 24% miss last quarter. The options market is positioned for an upside surprise this time. Whether that's justified after a big miss depends on what management says about the consumer.
We track the signal. Tomorrow we track the result.
$DKS $SPY $QQQ $VIX
