H2O America arrives at its Q1 2026 earnings print with one of the most striking short-positioning reversals in the water utility space: short sellers cut their exposure by 15% in a single week, yet the ORTEX short score remains elevated at 75.7, signalling that the structural bearish case is far from closed.
Short interest has dropped sharply from above 5.8 million shares in mid-March to around 4.6 million, bringing it to 12.8% of free float. That is still a meaningful short position for a regulated utility. Days to cover run at 29 — an unusually high figure that reflects thin average daily volume relative to the size of the short book. Borrow conditions, however, have eased. The cost to borrow hovers below 1% and availability has moved off its tightest levels, suggesting recent short covering was not forced. The options market tells a cleaner bullish story: the put/call ratio collapsed to 0.21 this week, well below its 20-day average of 1.79 and near the lowest reading of the past year. That sharp shift from heavy hedging to call-dominated flow is notable heading into the print.
The analyst community has grown more attentive in recent weeks. TD Cowen initiated coverage on April 17 with a Hold and a $64 target — essentially flat to Tuesday's close of $59.26. Barclays, which has maintained an Overweight rating since February, trimmed its target to $60 on April 15. Baird started at Outperform with a $67 target in March. The consensus mean target of $64.33 implies roughly 8% upside from current levels, though the spread from $60 to $67 across three recent initiations reflects genuine disagreement on the pace of growth. On valuation, the P/E multiple of 21.7x has expanded by about 1.3 points over the past month, and the EV/EBITDA of 11.4x has eased slightly, suggesting a modest re-rating higher as the stock climbed 2.2% on the month.
Ownership adds an interesting layer. ATLAS Infrastructure Partners nearly quadrupled its position to 4.58 million shares — 10.9% of the company — as recently as April 10. The Australian Government Future Fund added a fresh 2.6 million share position in early March. Together, these two moves represent significant strategic accumulation by infrastructure-focused allocators just ahead of earnings. On the insider side, the same April 10 date saw a 10% owner add roughly $3 million worth of stock at $59.06. Insider selling in the quarter was confined to small, compensation-related disposals.
The print will therefore test whether H2O America's revenue trajectory and rate-case progress justify the recent strategic accumulation — and whether the remaining short sellers, still carrying one of the larger DTC figures in the utility sector, have reason to stay in their positions.
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