Stock Traders Buy Large Volume of Put Options on Canaan (NASDAQ:CAN)

Key Points

• Bearish options activity surged on Canaan, with traders buying 13,218 put options, about 406% above normal daily volume, suggesting rising downside hedging or speculative caution.
• The stock fell 14.4% to $0.41 as investors digested weak recent performance and an earnings miss; the company reported an EPS loss of $0.13 versus expectations for a $0.07 loss.
• Despite the weak trading and earnings backdrop, Canaan highlighted record crypto treasury holdings and operational growth, while BTIG reiterated a Buy rating with a $3.00 price target.

Canaan Inc. Sponsored ADR (NASDAQ:CAN - Get Free Report) saw some unusual options trading on Tuesday. Traders bought 13,218 put options on the stock. This is an increase of approximately 406% compared to the typical daily volume of 2,613 put options.

Canaan Trading Down 14.4%

NASDAQ:CAN traded down $0.07 during trading hours on Tuesday, hitting $0.41. 9,849,130 shares of the company were exchanged, compared to its average volume of 13,024,238. The stock has a market capitalization of $295.79 million, a price-to-earnings ratio of -0.86 and a beta of 2.65. The company has a current ratio of 3.31, a quick ratio of 1.93 and a debt-to-equity ratio of 0.06. Canaan has a one year low of $0.39 and a one year high of $2.22. The company has a fifty day simple moving average of $0.48 and a 200 day simple moving average of $0.69.

Canaan (NASDAQ:CAN - Get Free Report) last announced its earnings results on Tuesday, May 19th. The company reported ($0.13) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.07) by ($0.06). The company had revenue of $62.69 million for the quarter, compared to the consensus estimate of $9.52 million. Canaan had a negative return on equity of 60.70% and a negative net margin of 39.69%.During the same period in the prior year, the business earned ($0.02) earnings per share. Sell-side analysts expect that Canaan will post -0.2 EPS for the current fiscal year.

Key Stories Impacting Canaan

Here are the key news stories impacting Canaan this week:

• Positive Sentiment: BTIG Research reaffirmed its Buy rating on Canaan and set a $3.00 price target, implying meaningful upside from current levels. Benzinga report on BTIG rating
• Positive Sentiment: Canaan announced record crypto treasury holdings of 1,807.60 BTC and 3,951.53 ETH, while installed mining computing power rose to about 11 EH/s, showing operational growth and stronger balance-sheet exposure to crypto assets. Canaan Q1 results press release
• Positive Sentiment: The company also won a competitive bid for a Nordic hash-to-heat district heating project, supporting its push into energy-integrated mining infrastructure and alternative revenue opportunities. Nordic hash-to-heat project announcement
• Neutral Sentiment: Management said first-quarter revenue of $62.7 million was in line with guidance, and the company highlighted improved liquidity from subsequent customer collections and lower G&A expense. Canaan Q1 financial results
• Negative Sentiment: The quarter still showed losses, with EPS of ($0.13) versus expectations for ($0.07), and the company’s new second-quarter revenue guidance of $35 million to $45 million came in far below the consensus estimate of about $95.9 million, pressuring sentiment. Zacks earnings miss article
• Negative Sentiment: Unusual options activity also leaned bearish, with heavy buying in put options, suggesting some traders are positioning for further downside.

Wall Street Analysts Forecast Growth

CAN has been the topic of several research reports. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Canaan in a research report on Monday, April 20th. Wall Street Zen raised Canaan to a "sell" rating in a research report on Saturday, April 18th. HC Wainwright reaffirmed a "buy" rating and issued a $1.50 target price on shares of Canaan in a research report on Wednesday, February 11th. Benchmark decreased their target price on Canaan from $4.00 to $2.00 and set a "buy" rating on the stock in a research report on Wednesday, February 11th. Finally, Rosenblatt Securities reaffirmed a "buy" rating and issued a $2.25 target price on shares of Canaan in a research report on Monday, March 16th. Six research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, Canaan has an average rating of "Moderate Buy" and an average price target of $2.17.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of the stock. SBI Securities Co. Ltd. grew its holdings in Canaan by 155.5% during the 4th quarter. SBI Securities Co. Ltd. now owns 1,698,885 shares of the company's stock worth $1,172,000 after acquiring an additional 1,034,040 shares during the period. Goldman Sachs Group Inc. grew its holdings in Canaan by 52.0% during the 1st quarter. Goldman Sachs Group Inc. now owns 587,451 shares of the company's stock worth $516,000 after acquiring an additional 200,869 shares during the period. Virtu Financial LLC acquired a new stake in Canaan during the 4th quarter worth about $46,000. Finally, SG Americas Securities LLC acquired a new stake in Canaan during the 1st quarter worth about $43,000. 70.14% of the stock is owned by institutional investors.

About Canaan

Canaan Inc is a China-based technology company specializing in the design and manufacture of high-performance computing hardware for the digital currency and blockchain industry. The company's core business revolves around application-specific integrated circuit (ASIC) miners, which are purpose-built machines optimized for cryptocurrency mining. By focusing on energy efficiency and processing power, Canaan's mining rigs aim to deliver competitive hash rates while managing power consumption in large-scale operations.

The flagship product line, known as AvalonMiner, encompasses a range of models tailored to different scales of mining activity, from small-scale hobbyist setups to industrial farms.

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