Skullcandy, Inc. (SKUL) develops and distributes headphones and other audio accessories to retailers in the United States and to distributors internationally. Its headphone products include in ear, on ear, over ear, and gaming headphones. The company also offers speaker docks, mobile device cases, apparel and other accessories.
Skullcandy's IPO was last summer. It reported its most recent earnings after the market closed on Wednesday. The press release for the announcement can be found here. Overall the results were about in line with analyst expectations.
In the short-term, it seems expectations were high for this earnings cycle. Perhaps this was somewhat because there was a fair amount of volume in the May $17.50 call. Some traders might have thought that whoever bought those calls "knew something" and earnings would beat expectations substantially. In reality, there might have been many reason for someone to have purchased those calls. Earnings were good, but not spectacular. In the short-term, this situation might create enough noise to push some of the speculators out of the stock, and drive the stock price down.
Once this short-term noise is over, it might be easier for investors to hear the companies announced mid-point estimate of $1.15/eps more clearly. If investors believe revenue can continue to grow at rates seen recently, it is not unrealistic to apply a 20 multiple to these earnings. That would yield a price of $23. However, the stock might run into resistance around the IPO price of $20. Many early investors might be looking to get out of their position around that level.
In full disclosure, I have a small position in Skullcandy. Given the info above it might be worth adding to the position if the stock pulls back toward $15 on this earnings news with the plan/hope of the stock rebounding back toward $20.
Disclaimer: This posting is for informational, educational and entertainment purposes only and should not be considered investment advice.