Knowles Soars 9.00%, What’s Fueling This Explosive Move?

Summary
• Knowles (KN) surges 9.00% intraday to $20.34, nearing its 52-week high of $20.855.
• Q2 2025 earnings highlight $146M revenue (+8% YoY) and $0.24 EPS (+20% YoY).
• Craig-Hallum upgrades price target to $22, signaling bullish sentiment.

The stock’s sharp rebound from $19.28 to $20.8 intraday reflects a confluence of strong earnings, margin improvement in Precision Devices, and aggressive buybacks. With $30M repurchased in Q2 and Q3 guidance above expectations, market participants are re-evaluating KN’s growth trajectory.

Earnings Surge and Analyst Upgrades Ignite Momentum
Knowles’ 9.00% intraday rally stems from a Q2 2025 earnings report that exceeded guidance across key metrics. Revenue grew 8% YoY to $146M, driven by 10% growth in MedTech & Specialty Audio and 6% in Precision Devices. The Precision segment’s 150-basis-point gross margin expansion and $30M share repurchases signaled disciplined capital allocation. Craig-Hallum’s $22 price target upgrade, citing energy sector tailwinds and margin resilience, further amplified optimism. Analysts are now pricing in $21.50 as the 12-month average target, with 15.22% upside from the previous close.

Options Playbook: Leverage High-Volatility Contracts
• MACD: 0.313 (bullish), Signal Line: 0.274, Histogram: 0.039 (positive divergence)
• RSI: 55.36 (neutral), Bollinger Bands: $18.82 (upper), $18.06 (middle), $17.30 (lower)
• 200D MA: $17.61 (below current price), 30D MA: $17.80 (below)

KN’s technicals suggest a short-term bullish breakout above its 52-week high. Key support at $17.50 and resistance at $20.80 define the trading range. For aggressive positioning, consider the KN20250919C20 call (strike $20, expires 9/19) and KN20251219P20 put (strike $20, expires 12/19).

KN20250919C20
• Delta: 0.7079 (high sensitivity to price moves)
• IV: 12.34% (moderate volatility)
• Theta: -0.0136 (time decay manageable for near-term)
• Gamma: 0.3458 (high sensitivity to price acceleration)
• Turnover: 0 (liquidity risk)
• Leverage Ratio: 29.11% (moderate leverage for a bullish breakout)
• Price Change Ratio: 0.00% (neutral)
This contract benefits from KN’s current momentum and offers leverage if the stock breaks above $20.80. A 5% upside scenario (target $21.35) would yield a ~6.5% payoff.

KN20251219P20
• Delta: -0.3917 (moderate bearish exposure)
• IV: 35.33% (attractive volatility)
• Theta: -0.0031 (low time decay for long-term)
• Gamma: 0.0838 (moderate sensitivity)
• Turnover: 447 (high liquidity)
• Leverage Ratio: 14.05% (low leverage but stable)
• Price Change Ratio: -66.28% (aggressive premium)
• Leverage Ratio: 14.05% (low leverage but stable)
This put offers downside protection if KN consolidates after the breakout. A 5% downside (target $19.32) would yield a ~16% payoff.

Action Alert: Aggressive bulls may consider KN20250919C20 into a break above $20.80. Conservative investors should monitor KN20251219P20 as a hedge against volatility.

Backtest Knowles Stock Performance
The backtest of KN's performance after a 9% intraday surge shows mixed results. While the stock experienced a positive surge, the returns over various time frames were relatively modest, and the win rates were not exceptionally high. This suggests that while the intraday increase was significant, it may not have led to sustained long-term gains.

Bullish Breakout on the Horizon: What to Watch Now
KN’s 9.00% surge signals a potential breakout above its 52-week high of $20.855. With Q3 guidance of $144–154M and margin expansion in Precision Devices, the stock is primed for a test of $22.00. Watch for a close above $20.80 to confirm bullish momentum. Meanwhile, Vishay Intertechnology (VSH) in the sector rose 0.53%, hinting at broader component demand. Investors should prioritize KN20250919C20 for upside and KN20251219P20 for downside protection. Act now: Position for a breakout above $20.80 or secure hedges if volatility spikes.