Will Toll Brothers Stock Break its Post-Earnings Curse?

Toll Brothers Inc (NYSE:TOL) is gearing up for its fiscal second-quarter report, due out after the close on Tuesday, May 19. Ahead of the event, Zacks Research is anticipating earnings of $2.57 per share on revenue of $2.41 billion, representing a year-over-year decline of 26.6% and 12%, respectively. 

TOL has a dismal post-earnings history, closing its last six consecutive post-earnings sessions lower, and seven of its last eight. The options pits are pricing in a 7.3% swing, regardless of direction, this time around, which is much larger than the 4.1% move the stock has averaged over the last two years.

On the charts, the homebuilding name hasn't been faring too well, hitting its lowest level since November on Friday. The stock is looking to snap its five-day losing streak today, however, last seen up 1% to trade at $127.53. Since the start of the year, the equity is down 6.3%, sitting firmly in "oversold" territory with a 14-day relative strength index (RSI) of 21. 

Puts have been more popular than usual in the options pits over the last 10 weeks, per TOL's 50-day put/call volume ratio of 1.60 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 92% of readings from the past year.  

What's more, TOL's Schaeffer's Volatility Scorecard (SVS) comes in at 27 out of 100. This suggests the equity has consistently realized lower volatility than its options have priced in -- a boon to premium sellers.