Even After Post-Earnings Surge, Underloved Polaris Stock Has More Upside Potential

Shares of Polaris Industries Inc. (NYSE:PII) are soaring today, thanks to the company's impressive earnings report. PII stock was last seen 15.5% higher -- making it the top S&P MidCap 400 Index (MID) percentage gainer today -- and earlier hit a two-year high of $126.85. The shares are now up 50% year-to-date, and are pacing for their first close above their 36-month moving average in over two years.

Interestingly, there's been no analyst attention on PII today. In fact, analysts have mostly remained bearish amid the stock's multi-month rise on the charts. Fifteen out of the 19 brokerages with coverage on the equity say it's a "hold" or "strong sell," and its average 12-month price target of $101.67 is well below current levels.

Plus, Polaris Industries is heavily shorted. More than one-fifth of its float is controlled by these bears, which would take more than three weeks to cover, based on average daily volumes. Short interest already fell more than 17% during the past two reporting periods, and there's clearly plenty of room for this trend to continue.

As contrarian traders, we would expect this pessimism across Wall Street to unwind, in the form of bullish analyst attention and more short covering. If this is the case, it should result in tailwinds for PII shares, and more upside could be in store.