Henry Schein reported Q1 2026 results on May 5 with short sellers still firmly in the trade and the Street more divided than the headline numbers suggest.
The clearest story this week is one of building short interest running into an earnings print that came in better than feared. Short interest has climbed to 7.1% of the free float — up sharply from around 5.9% in early April when the FINRA fortnightly settlement confirmed roughly 6.5 million shares short. That 23% month-on-month rise in estimated short shares is substantial. It represents a sustained, deliberate rebuild rather than noise, and it means bears were pressing the position right up to the May 5 release. Q1 revenue came in at $3,368 million, up from $3,168 million a year earlier, and diluted EPS from continuing operations rose to $0.92 from $0.88. Net income dipped modestly to $107 million from $110 million — a detail that keeps the margin debate alive heading into the summer.
The lending market does not suggest those short sellers face any immediate squeeze pressure. Availability is ample — borrow costs are running at just 0.43% APR, and utilization sits near 18%, well below the 52-week high of 36%. In other words, the pool of shares available to borrow remains more than sufficient relative to the shorts already in place. Options traders tell a complementary story. The put/call ratio has dropped to 0.07 — far below its 20-day average of around 0.10 and close to the lowest level of the past year at 0.04. That call-heavy skew reflects the crowd leaning for upside on the print, not bracing for a miss. The combination of rising short interest and a call-heavy options market set up an interesting tension into the release. The stock rose 3.3% on May 5 and the short score eased fractionally to 52.5 from recent highs above 53.8, suggesting some bears covered.
The Street remains broadly cautious, even after the beat. Mizuho this morning trimmed its target to $82 while holding a Neutral rating — a trim that landed right as Q1 numbers crossed the tape. Morgan Stanley, which has maintained an Underweight since at least early 2026, actually nudged its target slightly higher to $64 in late April, but that level implies meaningful downside from the current $74.37 close. Evercore ISI sits at $90 with an Outperform, and JPMorgan held Overweight with a $92 target following Q4 results in February. Two initiations arrived in mid-April: Citigroup came in at Buy with a $100 target, and BTIG initiated at Neutral without disclosing a target. The mean analyst target sits around $87 — roughly 17% above the current price — but the consensus hides real disagreement between bulls who see the M&A-led software and tech pivot as a multi-year earnings driver and bears who flag margin fragility and competitive pressure in dental distribution. The EPS 12-month forward growth rank scores in the 92nd percentile, a clear positive, but the P/E runs at just 13.5x — either cheap or appropriately priced for a low-margin distributor, depending on which camp you sit in.
On the institutional side, KKR remains the dominant holder with just over 13% of shares, though it trimmed roughly 388,000 shares in the last reported period. JP Morgan Asset Management and Dimensional Fund Advisors both added meaningfully in Q1. Insider activity through March was one-directional: eight executives and directors sold shares in mid-March at prices between $72 and $81. The volumes were modest — the largest single sale was the Chief Strategy Officer, Mark Mlotek, selling around $442,000 worth — and net 90-day insider flows showed buying rather than selling on balance, suggesting those March sales were routine rather than a signal.
With Q1 now digested and the Bank of America Global Healthcare Conference scheduled for May 12, the conversation will shift quickly toward what the company said on its call about full-year guidance and the pace of margin recovery in the medical segment, which remains softer than dental and technology.
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