Tactile Systems Technology has put together a sharp week, gaining 14% to close at $30.28, yet short sellers have barely flinched — leaving a notable tension between price strength and a still-elevated short position.
The most interesting dynamic here is what shorts are not doing. Short interest has edged down only 2.1% over the week to 10.5% of free float — a meaningful level at roughly 2.3 million shares. That reading is up 20% from a month ago, meaning the build that preceded this week's rally is still largely intact. Borrow costs, however, tell a different story: at 0.51%, cost to borrow is low and has fallen more than half from its month-ago level, when it was running above 1%. Availability is very loose at 664% — about six and a half shares available for every one already borrowed — so there is no structural squeeze pressure building in the lending market. Options traders are leaning the other direction. The put/call ratio dropped to 0.57, nearly two standard deviations below its 20-day average of 0.62, the most call-skewed reading seen in weeks. That signals options positioning has turned notably more bullish, running against the grain of a short book that remains stubbornly large.
Analysts are firmly behind the stock, with four Buy ratings and no holds on the book. BTIG reiterated a $40 target in late May, while B. Riley upgraded to Buy after the Q1 print, lifting its target from $32 to $36. Piper Sandler sits at $42. The consensus mean target of $39.50 implies roughly 30% upside from current levels — a meaningful gap that helps explain the call-side interest. The bull case centres on TCMD's position in the Medicare-driven home therapy market for lymphedema, with projected revenues above $400 million in the next couple of years and the LymphaTech acquisition adding a diagnostic angle. Bears flag relatively high operating expenses and execution risk around integrating LymphaTech. Factor scores tilt toward quality of earnings: the EPS surprise rank is near the top of the universe at the 93rd percentile, and 30- and 90-day EPS momentum scores of 75 and 70 respectively show analysts are still nudging numbers higher even after the post-earnings reset from earlier this year.
The most recent earnings print, from early May, showed a one-day move of 8.1% — effectively identical to this week's single-session gain of 8.1% on Thursday. The prior print also moved the stock 5.1% higher on the day. That consistent post-earnings pattern of positive gaps is notable context as the next report is scheduled for August 3.
What to watch heading into August is whether the short book — still near its highest level in a month — continues to unwind as the stock presses higher, or whether sellers use any pre-earnings strength to rebuild positions against a backdrop of still-abundant borrow supply.
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