Staffing and employment service provider ZipRecruiter (ZIP) is down 40% over the past year as jobless claims continue to rise and total open jobs decline. One trader sees shares popping higher into next year.
That’s based on the January 2025 $12.50 calls. With 126 days until expiration, 35,895 contracts traded compared to a prior open interest of 186, for a massive 193-fold rise in volume on the trade. The buyer of the calls paid $0.20 to make the bullish bet.
ZipRecruiter last traded for just under $9, so shares would need to rise by just over $3.50, or 38% for the option to move in-the-money. Shares hit a 52-week low of $7.21 back in early August, and have been trending higher.
Operationally, the company has been hit by the slowdown in the labor market. Earnings are down by half over the last year, and revenues are down by more than a quarter.
The company does have over $500 million in cash on the balance sheet, and can likely find a way to thrive in a slowing labor market.
Action to take: Speculative investors may like shares here, as they’re trending higher and could flip to growth under an economic soft landing.
For traders, the January $12.50 calls are unlikely to move in-the-money, but are inexpensive enough that a further rally could deliver high double-digit returns before the option expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.