PATH heads into July with a stubborn short position, a recovering stock price, and a Street that keeps trimming targets — a setup where the bulls and bears are talking past each other.
The short interest story is the most striking feature of the current picture. Nearly 28% of the free float is sold short — 126 million shares as of June 30 — with that figure up roughly 3% on the week and nearly 9% over the past month. That is a meaningful accumulation of bearish bets against a stock trading at $10.87. The ORTEX short score of 69.5 ranks in just the 6th percentile of the universe, a strongly bearish signal. Yet the lending market does not reflect any immediate squeeze pressure. Borrow availability runs at roughly 80% — well within the normal range — and the cost to borrow is negligible at under 0.7%. Availability has tightened about 11% on the week, which is worth watching, but the pool remains large relative to the short position. Bears can still enter and exit this trade with minimal friction.
Options positioning adds a cautious wrinkle. The put/call ratio hit 0.58 on June 30, running about 1.8 standard deviations above its 20-day average of 0.49 — close to its 52-week high of 0.67 touched the prior session. That uptick in put demand does not scream panic, but it does represent a meaningful shift from the broadly call-heavy positioning that dominated through most of May and early June. Combined with the rising short interest, the overall picture is one of incremental caution being added at the margin, not aggressive conviction in either direction.
The Street broadly agrees that near-term upside is limited. The consensus mean price target is $13.25, roughly 22% above current levels — which sounds constructive until you look at the direction of travel. UBS cut its target to $12 this week while maintaining a Neutral rating. That follows a cluster of post-earnings target reductions in late May: Morgan Stanley trimmed from $17 to $15, BMO Capital dropped to $13, DA Davidson moved to $12, and Truist cut all the way to $12. The one voice still leaning constructively is Needham, holding a Buy with a $15 target. Bank of America is an outlier in the other direction — it raised its target slightly to $13 but maintains an Underperform. The bull case centers on the company's 14% revenue growth, a $1.475B RPO growing at 19%, and an ARR base approaching $1.9B. The bear case fixates on dollar-based net revenue retention slipping to 107%, limited margin expansion, and the persistent multiple compression afflicting the software sector broadly. The EV/EBITDA multiple, at roughly 7.8x, has compressed about 5% over the past month, reflecting the market's skepticism about the growth narrative. The forward EPS improvement score ranks in just the 9th percentile — deeply out of favor on the growth axis.
Peers moved broadly in the same direction on the week. DOCU added 4.1%, BOX gained 6.2%, and WDAY rose 6.3% — all in line with PATH's 7% weekly gain. The notable outlier was DOMO, surging nearly 40% on the week, suggesting there is idiosyncratic event risk in the small-cap software space that could pull attention away from PATH. PATH's bounce looks like a sector-driven relief rally rather than a company-specific re-rating, consistent with nothing in the short interest or options data pointing to a change in bearish conviction.
The next scheduled earnings event falls in early September. Between now and then, the metric to watch is whether the short interest continues its month-long accumulation trend or whether the recent daily flatness marks a ceiling — the answer will determine whether availability tightening becomes a story in its own right.
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