CART enters September with a notable divergence: short sellers have been steadily covering over the past month, yet the stock dipped nearly 3% this week despite a strong analyst tailwind following last month's earnings beat.
The most compelling shift in CART's positioning is the speed of short-seller retreat. Short interest has fallen 13% over the past month, from roughly 16.9 million shares to 14.5 million — bringing SI down to 5.5% of the free float, its lowest level in the period tracked. The move is broad and consistent: shares short declined almost every week through August as the post-earnings rally eroded the bearish thesis. The borrow market reinforces the picture of a stock that simply isn't attracting aggressive new short positioning. Availability is exceptionally loose, with roughly 100 million shares available to borrow — nearly 29 times current short interest. Cost to borrow nudged up 18% on the week to just 0.40%, but that number remains trivially low in absolute terms and carries no meaningful squeeze implication. The ORTEX short score has drifted lower too, from 48.5 at the tail end of August to 46.6 now, placing CART in the lower third of short-pressure readings across the universe.
Options sentiment reinforces the low-defensiveness read. The put/call ratio closed at 0.41 — below its 20-day average of 0.45 and roughly one standard deviation on the bullish side. Calls are dominating the options tape, suggesting traders are leaning toward upside participation rather than hedging into the next catalyst. That next catalyst is earnings on November 6, still two months away.
The Street is broadly constructive, though the bulls are split on valuation headroom. Following the Q2 print — which the stock received with a 10.6% one-day gain — nearly every firm raised its price target. Argus Research was the most recent, lifting its target to $58 this week while maintaining a Buy. Rosenblatt initiated coverage at Neutral with a $55 target on September 1 — close to spot, and a signal that at least one new set of eyes sees the stock as fairly priced near current levels. JP Morgan lifted its target to $62 and maintained Overweight; Barclays is the most bullish on the Street at $77. The consensus mean target sits at $57.46, roughly 15% above the current $50.05. The bull case rests on GTV growth — 14% in the latest quarter, the fastest clip since late 2022 — and advertising revenue expansion. Bears point to margin compression and intensifying competition as Kroger's exclusivity arrangements unwind. EBITDA estimates have been trimmed 2% even as volume metrics improved, which is the central tension bulls need to resolve. On valuation, the trailing PE has expanded to nearly 11x over the past month, while EV/EBITDA has contracted modestly to around 7.9x — a mix that reflects earnings improvement outpacing price appreciation.
One item on the register worth flagging: SC US (TTGP) — which filed a Schedule 13D on CART, marking it as an activist holder — disclosed in an August 17 amendment that its stake has fallen from 9.5% to 8.0%. The 13D designation means activist intent was declared on filing. The reduction in stake is as last disclosed around the 5% threshold, and holders may continue trimming without a further filing unless they cross below that level. Worth monitoring.
Insider activity over the 90-day window has been net negative to the tune of roughly $1.4 million, driven primarily by the CLO's planned 10b5-1 sales in late August and a discretionary director sale of just over $515,000 on August 27. None of these are unusual in size or pattern for a company where management holds significant equity, but the absence of any open-market buying means insiders aren't adding conviction signals alongside the analyst upgrades.
With shorts covering, availability deep and loose, and options leaning bullish, the setup heading into November earnings will hinge on whether the advertising margin story improves enough to validate the more aggressive targets above $60 — or whether Rosenblatt's neutral, near-the-money initiation proves the more prescient read.
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