WEST just put in one of the most violent post-earnings moves you'll see in the small-cap consumer space. The stock jumped 48% on May 8 after Q1 results, and the week closed with a 49% gain to $8.65. The question is simple: with the rally this dramatic, does the short position unwind, dig in, or flip into a squeeze?
The positioning story is the most interesting angle here. Short interest was running at roughly 6% of the free float through most of April, a level that was enough to matter without being extreme. What's notable is what happened after the earnings spike — shorts began covering. SI dropped 9.6% over the week to 5.97% of the float, the fastest unwind in over a month. The borrow market has tightened slightly in response. Cost to borrow edged up to 2.19% annually from around 1.56% a week ago. That's still a cheap borrow, so there's no squeeze pressure from the lending side. The ORTEX short score remains elevated at 82, however — down from a recent peak above 84 but still in the top tier of the universe, signalling the overall short positioning picture hasn't flipped bullish.
Options traders have turned notably more defensive into the move, which is an interesting divergence from the price action. The put/call ratio jumped to 0.72 — its highest reading of the past year and almost three standard deviations above the 20-day mean of 0.61. That's not a sign of bullish conviction from the options market; it reads more like holders buying downside protection after a near-doubling in price over a month. The stock is up 75% over the past month from around $4.95 to $8.65, so hedging the rally makes sense from a risk management standpoint.
Analysts moved quickly to catch up with the stock. Benchmark raised its price target from $8 to $10 on May 11, just days after earnings, while maintaining a Buy. Telsey Advisory Group updated to a $9 target following Q1. The consensus mean target is now $8.88, sitting fractionally above the current price — meaning the Street collectively sees the stock as roughly fair value at these levels. The bull case rests on continued volume growth in the Beverage Solutions segment, which surged 56.6% in Q4 2025. The Conway facility ramping to full operations has been central to management's growth story, and the Q1 beat reaffirmed $90–$100 million adjusted EBITDA guidance for 2026. The bear case centres on that same guidance — it's well below the $130–$150 million previously expected, and the $15 million hit from lost single-serve volume due to industry consolidation isn't fully behind the company yet. Net leverage at 3.85x adds a further layer of caution for those watching the balance sheet. The EV/EBITDA multiple, now near 16x on a forward basis, has compressed over the past 30 days as the EBITDA outlook settled at a lower range.
The ownership structure adds another dimension. Founders and insiders dominate the cap table — Westrock Asset Management holds nearly 24% and BBH Capital Partners another 22%. Back in mid-March, when the stock traded near $4, founder and Chairman Joe T. Ford bought 100,000 shares across two transactions at prices between $3.92 and $4.60. That's $429,400 of personal capital deployed at the lows, a level that now looks prescient at $8.65. The CFO and COO were selling smaller amounts on the same dates — those look like tax or vesting-related moves given their modest size. The net insider position over the 90-day window is a net buy, with the Chairman's purchases dominating. Zacks upgraded the stock to Hold on May 13, reflecting the changed calculus after the earnings beat.
The next earnings date is June 5, less than a month away. With short interest still above 5% of float, the ORTEX short score in the low 80s, and options traders now hedging aggressively, the setup heading into that print looks notably more charged than it did a week ago. The key variables to watch will be whether the Conway facility ramp continues to build volume, whether the single-serve headwind proves to be truly contained at $15 million, and whether short covering continues to provide mechanical support for the price — or reverses.
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