SCI Short Interest Jumps 14% in a Week, but the Print Lands Today

Service Corporation International reports Q3 results this morning with a notable shift in short positioning since the previous earnings preview published four days ago: short interest has climbed 14% over the past week to 3.6% of the float, a move that ORTEX flags as 1.6 standard deviations above the company's typical weekly change. That is the most significant development since the October 25 note, which described a falling short base. The shares slipped 0.2% on Wednesday to close at $82.33, about 1% below where they traded when that earlier article was written, though the stock is still up 5.8% over the past month.

The week-on-week short jump is worth context. The absolute level, 5.0 million shares or 3.6% of the float, remains modest. Borrow conditions have not tightened materially: cost to borrow has eased to 0.43%, down 18% on the week, and availability is extremely loose at 1,295%, meaning there are roughly 13 shares available to lend for every one already borrowed. The short-score reading of 41.7 sits in the 40th percentile of the ORTEX universe, consistent with limited bearish conviction. The week's increase looks more like a positioning adjustment than a structural build against the company.

Options tell a different story. The put/call ratio at 0.21 remains near its 52-week low of 0.21 and is fractionally below its 20-day average of 0.22. Call dominance this pronounced is unusual for this stock. That skew has held steady through the week even as short interest rose, creating a divergence worth noting: traders in the options market are not hedging into the print the way the short interest move might imply.

The analyst community is constructive but the consensus has not been refreshed since late July, when UBS raised its target to $105 following Q2 results. The mean price target of $100.33 implies roughly 22% upside to current levels. The bull case centres on pre-need cemetery sales growth running above 5% and accelerating average revenue per funeral service. Bears point to historically modest EPS growth, regulatory risk around the FTC's Funeral Rule, and competitive barriers in certain regional markets. The stock's forward earnings yield factor scores in the 64th percentile, suggesting the valuation is not stretched against the broader market, though the price-to-book multiple of 6.7 reflects a premium the company has carried for some time.

The print will test whether the Q3 volume and pricing trends justify the stock's 5.8% monthly gain and the persistent call-side skew, particularly given the week's abrupt reversal in short positioning.