Firefly Aerospace Stock Skyrockets Off Lows Before Earnings

Firefly Aerospace Inc (NASDAQ:FLY) is preparing to report third-quarter earnings after the close tomorrow, Nov. 10. Zacks Consensus Estimates call for a loss of 49 cents per share, representing a 48.5% year-over-year improvement. Revenue is expected to come in at $106.31 million.

FLY was last seen up 14.3% at $23.72, extending last session's 36.8% surge off its Nov. 5 record low of $14.45. The aerospace stock is up 3% year to date, while its 14-day Relative Strength Index (RSI) of 72.7 indicates "overbought" territory.

As a relatively new public company, Firefly has a limited post-earnings history. Looking back at its last five quarterly reports, the stock finished the following trading session higher three times, averaging a 7.9% move, regardless of direction. This time around, the options pits are pricing in a much larger 16.3% post-earnings move.

Firefly has also exceeded earnings expectations in each of its last four quarterly reports, delivering narrower-than-anticipated losses. Most recently, the company reported a loss of 42 cents per share in August, compared to the expected loss of 52 cents. 

Options traders have been picking up puts at a faster-than-usual pace ahead of the event. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FLY's 10-day put/call volume ratio of 0.68 ranks in the 98th percentile of its annual range. This suggests an unusually strong appetite for puts relative to calls, despite calls outnumbering puts on an absolute basis.

Short sellers are also targeting the stock, with short interest accounting for 9.3% of FLY's available float. At the equity's average pace of trading, it would take more than four days for shorts to cover their bearish bets.