• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Options

We're Taking Investors to 'Task'

We see a trading opportunity around a fast-growing name whose shares have been hit hard.
By BRET JENSEN
May 01, 2022 | 12:45 PM EDT
Stocks quotes in this article: FB, TASK

Here's your task -- if you decide to accept it.

We see a trading opportunity around a fast-growing name that debuted on the market less than a year ago. TaskUs, Inc. (TASK) is a digital business process outsourcing concern, operating digital call centers and providing content security for social media, e-commerce, delivery, fintech, and many other verticals.

The company is based in Texas, but the majority of its labor force is in The Philippines even as it has numerous sites across the globe, as seen by this company slide below.

As the company's moniker implies, the company handles various tasks for multitude of clients. These include content moderation for clients such as Meta Platforms (FB) as well as user support via chat, SMS, social, or in-app to ride-sharing, e-commerce, food delivery, and media streaming clients.

TaskUs also offers data tagging, annotating, and transcription services for the purpose of increasing the efficiency of AI algorithms. The company has a diverse customer base with a client roster of over 100 technology concerns, including 16 that paid it more than $10 million and 72 that generated more than $1 million in 2021.

The company was part of the massive wave of IPOs in 2021 and the shares hit their all-time high of just north of $85.00 a share last September. However, like just about every IPO from that "vintage" the shares have been shellacked over the past couple of quarters.

TaskUs did post solid fourth-quarter numbers at the end of February. At that time, management provided 2022 revenue guidance of $990 million, which would be a solid 30% rise over 2021 and was approximately $35 million over the analyst consensus at the time.

With a market capitalization of approximately $2.6 billion, TASK is currently trading at less than three times forward sales. This represents more than decent value, in our view, given the company is already profitable and has a solid balance sheet.

The stock doesn't seem to have a lot of more downside at this point. That said, until investor sentiment on growth stocks improves, the shares may muddle around.

So can we play it?

With solid option premiums and good liquidity in the option markets, TaskUs provides a good covered call opportunity that provides solid downside protection as well as more-than-acceptable potential upside.

Our Covered Call Option Strategy

Here is how one can initiate a position in TASK via a covered call strategy. Remember, covered call orders involve buying an equity and simultaneously selling just out of the money call strikes against the new position.

Using the December $30 call strikes, fashion a covered call order with a net debit in the $21.60 to $21.80 a share range (net stock price - option premium). This strategy provides approximately 25% of downside protection and nearly 40% of potential upside even if the stock does very little over the option duration.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: IPOs | Investing | Options | Stocks | Trading | U.S. Equity

More from Options

A Relatively Forgiving Bearish Natural Gas Strategy for Paper Traders

Carley Garner
May 24, 2022 3:28 PM EDT

Despite the treacherous nature of the market, most people have an opinion to express on the direction of gas prices.

Bettin' a Buck on Devon

Mark Sebastian
May 24, 2022 1:39 PM EDT

Here's where I see Devon Energy going and how to play it.

Let's Pop the Hood on AutoZone to See How Its Engine Is Running

Stephen Guilfoyle
May 24, 2022 10:20 AM EDT

The auto parts retailer's third-quarter results trounced expectations, but its large debt and inventory positions offer reasons to pause before buying its shares.

It's Easy to Overlook This Basic Rule of Investing

Paul Price
May 24, 2022 7:00 AM EDT

You can make big money via buying low. You just can't prove it until later.

Gravity Is Pulling on Apple

Mark Sebastian
May 23, 2022 2:32 PM EDT

Here's where I see AAPL going and how to play it.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login