WD-40 Company walks into its earnings release tomorrow — scheduled for July 9 after-hours — having rallied 23% in a single month, with short sellers quietly rebuilding positions and options traders signalling a touch more caution than usual.
The most striking number in the setup is that short interest has climbed nearly 20% over the past month, reaching 4.6% of the free float. That is not an extreme level, but the pace of accumulation is notable. Shorts added roughly 105,000 shares since early June, pushing the position to around 618,000 shares. The move comes as the stock itself surged — meaning bears stepped in to fade a rally that took the stock from roughly $203 to $250. The lending market offers no friction to that trade: availability remains extraordinarily loose at over 2,300% of short interest, meaning there are roughly 23 shares available to borrow for every share currently shorted. Cost to borrow is negligible at 0.48%, barely changed on the week. This is a market where shorts face no mechanical pressure — they can build and hold positions cheaply with ample supply.
Options positioning adds a layer of unease. The put/call ratio closed Tuesday at 0.67, running well above its 20-day average of 0.61 — a z-score of roughly 1.77, close to the top of its recent range. That is not extreme by absolute standards, but it represents the most defensive lean options traders have shown in several weeks. Put demand picked up sharply on Monday and Tuesday after sitting in a narrow 0.57–0.59 band throughout late June. Coming into a print, that tilt is worth noting.
The Street is broadly constructive but has been trimming ambitions. All three active analysts carry buy-equivalent ratings, and the mean price target of $255 sits close to the current price at $250, implying modest upside. DA Davidson cut its target from $300 to $270 in April — the most recent formal move — while William Blair initiated coverage with an Outperform in early April. The bull case rests on genuine fundamental momentum: the last quarterly print delivered EPS of $1.54 against a $1.40 consensus, with gross margins expanding 310 basis points to 56.2%. The bear case is simpler — valuation. The stock trades at roughly 37x earnings, and the short score factor ranks only in the 39th percentile across the universe, reflecting some lingering skepticism about whether the premium multiple is sustainable. The dividend score is an outlier at the 98th percentile, underlining WDFC's appeal to income-oriented holders, though the dividend history in the data is dated and not treated here as current.
Among closest peers, KMB gained 4.4% on the week and PG added 2.9%, both outpacing WDFC's 2.5% weekly gain. CHD and HEN3 also moved higher. CENT was the outlier, dropping 4.1% — suggesting the consumer-products group is broadly firm rather than universally bid, with selectivity around valuation.
The one prior earnings reaction in the history is a useful data point: the April print sent the stock down 2.4% the next day and 7.1% over the following five sessions, despite what turned out to be a beat. That pattern — beat the number, sell the stock — will be front of mind for traders watching tomorrow's release, particularly given the 23% run into the print and a valuation that already prices in considerable optimism.
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