Aurora Innovation heads into its May 21 report with options traders running one of the most call-skewed setups in the stock's recent history, even as short sellers hold a meaningful stake and yesterday's 6.5% drop brings the earnings backdrop to a head.
Options positioning reflects unusual bullish conviction into the print. The put/call ratio has drifted to 0.155 — essentially at the 52-week low of 0.118 — and is running fractionally below its 20-day average. That puts hedging demand close to the lowest level of the year, the mirror image of what a cautious market typically looks like before a volatile catalyst. Short interest tells a different story: 11.8% of the free float remains borrowed, with days to cover above eight per FINRA data. The borrow market, though, shows little tension. Cost to borrow has eased to just 0.72% — down from above 0.8% last week — and availability sits near 190%, well within the comfortable range. Short sellers are present but not pressing; the lending market gives them no urgency to cover.
The analyst community is split, and the gap between the bulls and bears is wide. TD Cowen lifted its target sharply to $7 from $4.70 last week, maintaining a Hold — a move that acknowledges momentum without conviction. Needham stayed at a $13 Buy. Goldman Sachs, the bellwether voice, sat at Neutral with a $5 target raised from $4 back in April, still well below the current price. The consensus sits at Buy with a mean target near $10.56, implying meaningful upside from $6.94 — but the Goldman Neutral anchors the sceptical case. Bulls point to the Aurora Driver rollout, 50%-plus hardware cost reductions on the second-generation kit, and a credible path to gross profit positivity by late 2026. Bears focus on near-zero revenue — just $1M last quarter — and the scale of operating losses, which make any near-term profitability argument a long-distance projection. EPS momentum scores in the 80th percentile over the past 30 days, suggesting estimates have been moving up, but the forward earnings yield remains deeply negative.
The institutional register adds an unusual dimension. Uber Technologies holds 16.6% of shares, and T. Rowe Price built a significant new position in Q1, adding over 160 million shares to reach 15.1%. Morgan Stanley Investment Management also added materially. These are not passive index flows — active managers are making a directional call. That concentration of new institutional buying into the quarter contrasts with the stock's recent retreat: AUR is down 6.5% on the day and 3.9% on the week after running up over 30% in the prior month. The pattern in the one previous comparable earnings event shows a 9.3% one-day jump and a 28.6% five-day rally — that reading reflects the May 6 commercial launch announcement rather than a traditional quarterly print, making it a difficult base to compare cleanly.
Tomorrow's report is less a test of Aurora's technology thesis and more a test of whether Q1 operational metrics — fleet miles, revenue recognition, hardware cost trajectory, and cash runway commentary — justify the valuation multiple expansion that has already taken place.
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