The stock has been on a tear, up 78.5% year-over-year
Footwear concern Deckers Outdoor Corp (NYSE:DECK) is higher in early trading, after the company last night reported better-than-expected fiscal fourth-quarter earnings, and a 15% increase in same-store sales. In response, the stock has received no fewer than seven price-target hikes, with the highest coming from Tesley Advisory Group, which raised its target to $125 from $115 -- deep into all-time-high territory.
As such, DECK stock is up 4.2% in electronic trading, set to open at a fresh six-year high, after closing at $103.67 yesterday. The apparel concern has been on a tear, surging 78.5% over the past 12 months, including a more than 11% rise in May alone. In fact, this would be the fifth straight quarter the shares have gained the day after earnings.
In the options pits, traders have been heavily bullish towards the security, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing the retailer with a 10-day call/put volume ratio of 1.89, ranking in the 89th annual percentile. This indicates that calls have been purchased over puts at a faster-than-usual clip during the past two weeks.
The retail stock is heavily shorted, though, with the 4 million shares sold short representing nearly 14% of the available float. At DECK's average daily trading volume, it would take more than eight days for shorts to cover their bearish bets -- meaning there's ample fuel for a
short squeeze. Plus, just three of the 11 covering analysts currently consider it a buy, leaving the door open for even more bull notes to come through on the outperformer.