VistaPrint: Optimistic Outlook Begets Profitable Options

We are ending our options trading activities this week with an exploration of the options of VistaPrint Limited (NASDAQ:VPRT). VistaPrint with its market capitalization of $2.09B is an online provider of coordinated portfolios of customized marketing products and services to micro businesses worldwide. Businesses looking for some unique promotional product ideas could consider something like nylon lanyards, like those one can find at CustomLanyards4All. The Company offers a range of brand identity and promotional products, marketing services and digital solutions. Shares of VistaPrint are having an impressive bullish run and I think options traders can join the ride for profits on VPRT options.

Recent Bullish Run

VPRT Calls

The chart above shows how the shares of VistaPrint have started today’s session on a strong bullish note as the stock as recorded gains of 3.69% to $66.61 per share (around 10:40AM EDT) after touching an intraday high of $66.80 to make a new 52-week high. The stock currently trades above its 50 and 200-day moving averages, and the bullish momentum is strong enough to carry the stock to new highs.

More exciting is the fact that the stock has recorded 6 new highs in the last one month as its share price recorded a 23.91% gain within the same period. The most exciting part, is that the bullish ascent in the shares of VistaPrint are not out of place because the stock had hitherto been trading in the upper $50s at the end of the last year before it started experiencing a turbulence earlier this year.

Why is VPRT Surging Today?

One of the major reasons behind the surge being recorded in the shares of VistaPrint is the company’s release of better than expected first quarter (Q1 2015). Highlights of the first quarter results are presented below.

VistaPrint reported earnings of $0.86 per share to mark an unbelievable 87% year over year increase and to beat the consensus estimate of $0.57 per share

The company reported that GAAP net income per diluted share increased to $0.71, compared with $0.01 in the same quarter last year

The company reported revenues of $333.9M to mark a 21% year over year improvement and to beat the consensus estimate of $331.1M

Positive Outlook Ahead

Another interesting and market-moving event for the shares of VistaPrint is the company’s optimistic guidance for fiscal 2015. It might interest you to know that VistaPrint only provides earnings and revenue guidance on a fiscal year basis as opposed to the common fiscal quarter guidance.

The company says expects revenue to come in between $1.43B and $1.50B in fiscal 2015, a little above the consensus estimate guidance of $1.49B in revenues. The company expects its fiscal 2015 earnings to come in between $3.46 per share to $3.96 per share, above the consensus estimate of $3.68 per share.

How to Trade VPRT Options

I am optimistic about the upside potential in shares of VistaPrint and it is hard not to stay bullish, considering the fact that the company’s revenue is expected to grow by 17.60% this year and by another 8.60% next year. In addition, its earnings will surge 24.70% this year, an additional 23.40% next year and continue to compound at an annual rate of 19.25% for the next 5 years.

I recommend buying the VPRT Jan 2015 60.000 call (VPRT150117C00060000) at an asking price of $8.40. Buying the contract will have us betting that shares of VistaPrint will rise to a $68.50 share price for us to break even on the contract.

— Daily Option Alerts

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