Peloton Interactive is in an unusual place this week — the stock just posted its best one-month gain in over a year, yet short sellers are quietly rebuilding positions that had collapsed following a strong earnings surprise.
Short interest rose 5.3% over the past week to 13.4% of the free float, reversing a dramatic unwind that had run from mid-April through to late April. At the early-April peak, SI sat above 16% of the float. A solid Q3 print on May 7 — the stock jumped 9.4% on the day — triggered a wave of covering that brought shorts below 12.3% by April 27. The rebuilding since then is the week's main story. Shorts are not panicking back in at scale, but the drift higher is consistent and deliberate.
The borrow market is remarkably calm for a stock with 13%-plus short interest. Cost to borrow hovers near 0.42% annualised — barely above a general collateral rate and down sharply from the 0.49%-0.57% range that prevailed in early April. Availability is very loose. The ORTEX short score has crept to 57.6, its highest point in the past ten days, but the absolute level is mid-range and nowhere near squeeze territory. The overall picture from the lending desk: there is no crowding, no squeeze pressure, and shorts face essentially no friction rebuilding.
Options traders are leaning bullish, not cautious. The put/call ratio has dropped to 0.39 — well below the year's high of 0.63, and right at the 20-day average. The z-score is nearly flat at -0.19, meaning there has been no meaningful shift in options sentiment this week. That is notable context: even as short sellers quietly add exposure, the options market has not moved to hedge. Buyers of calls are running the show.
The most recent analyst moves align with the bullish options tone. Goldman Sachs — a bellwether voice — raised its price target to $8 from $7 on May 8, maintaining its Buy rating. Macquarie also lifted its target to $7 from $6 on the same day. Both firms acted immediately after the Q3 print. The consensus mean price target is $7.97, against a current price of $5.39, implying roughly 48% return potential on Street estimates. The EV/EBITDA multiple has drifted up modestly to 6.7x over the past week, consistent with a market re-rating the story higher post-results. Earlier analyst activity from February — Citi and JPMorgan both cut targets after a disappointing Q2 — is now months stale and less relevant to the current setup.
The bull case rests on Peloton's subscription segment, which has shown resilience even as hardware revenues remain under pressure. The bear case is equally clear: hardware sales are still soft, the company's free cash flow is tracking below expectations, and revenue growth has been pushed out toward fiscal 2027. Both sides of that argument remain live. Top institutional holders — Vanguard, BlackRock, and Fidelity's FMR have all added modestly in their most recent filings — while active managers like Eminence Capital and D.E. Shaw added more aggressively at year-end 2025, suggesting the institutional bid has been supportive at lower prices.
The next earnings event is not until August 20. Between now and then, the question is whether the post-earnings short rebuild stalls at current levels or accelerates — and whether the options market eventually reflects more of the caution that short sellers are beginning to show.
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