Put Traders Move in Ahead of Dick's Sporting Goods Earnings

Dick's Sporting Goods Inc (DKS) stock climbed 0.7% to $220.67 ahead of its first-quarter earnings release on May 27, extending gains after a recent pullback. The stock has surged 11.3% year-to-date, though it has struggled post-earnings in the past, dropping after four of its last eight reports, including a 4.8% decline in August. Options traders are pricing in a larger-than-average move of 10.1% ahead of the earnings event, signaling heightened uncertainty. The 10-day put/call volume ratio stands at 1.20, above 73% of the past year’s readings, indicating a more bearish stance than usual. Despite the caution, 13 of the 22 covering brokerages maintain a 'buy' or 'strong buy' rating on DKS, leaving room for potential downside if earnings disappoint. Historically, the stock has averaged a 4.5% move post-earnings, regardless of direction. Dick's Sporting Goods also shows low volatility relative to options pricing, with a Schaeffer's Volatility Scorecard (SVS) of just 2 out of 100. This suggests the stock has underperformed expectations in terms of volatility over the past year. The upcoming earnings report will be critical for DKS, as recent trends and trader sentiment point to potential volatility ahead of the release.