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WD-40 Company reports after the close today with the stock up 21% in a month, shorts rebuilt into the rally, and options traders the most defensive they've been in weeks.
The positioning picture is consistent with yesterday's preview — and the data has barely shifted in 24 hours. Short interest holds at 4.6% of the free float, with shorts having added roughly 105,000 shares since early June to fade a move from around $203 to $247. The lending market still imposes no friction on that trade. Availability remains extraordinarily loose at over 2,375% of short interest — more than 23 shares available to borrow for every one currently shorted — and cost to borrow is negligible at 0.48%. Options positioning has ticked slightly more defensive since yesterday: the put/call ratio closed Wednesday at 0.69, now running more than two standard deviations above its 20-day average of 0.61. That's the most cautious options read in recent weeks, though it remains a measured hedge rather than an aggressive bet on downside.
The debate heading into the print is really about whether the valuation can hold. Bulls point to a strong operational track record — the last quarterly report delivered EPS of $1.54 against a $1.40 consensus, with gross margins surging 310 basis points to 56.2%. The analyst consensus remains Buy, with a mean price target around $255, modest upside from current levels. Bears note that the stock trades at roughly 37x trailing earnings with price-to-free-cash-flow at extreme multiples, and that the same analysts who like the business have been trimming targets — DA Davidson cut from $300 to $270 in April after cutting from $322 to $300 the prior year. The stock has rallied sharply into a report where the bar has already been set higher by its own recent outperformance. Peers including PG, KMB, and CHD were all up on the week, so the sector tape offers no particular headwind — but WDFC's premium to those names is pronounced.
The print will test whether the margin expansion and earnings beat that drove the recent rally can be sustained at a pace that justifies a near-40x multiple — or whether the stock has simply run ahead of what the fundamentals can deliver.
See the live data behind this article on ORTEX.
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