Advance Auto Parts heads into its May 20 earnings report with short sellers actively rebuilding positions and the stock down 3.6% on the week — even as the one-month view still shows a 10% gain.
Short interest is the defining story right now. At 19.1% of the free float, it is among the most heavily shorted names in the retail sector. The more telling detail is the shape of the past two weeks: SI dropped sharply to roughly 17.3% in mid-April, only to snap back above 19% by April 23-24. That rebound of nearly 1.8 percentage points in a single session is not noise. It suggests a deliberate re-entry by shorts — not a drift — timed closely to the stock's recovery off its April lows. The ORTEX short score confirms the pressure, sitting at 71 and holding near its two-week range high. Days to cover from the latest FINRA data run to 8.76, which means any sharp upside move has real covering risk attached to it.
The lending market tells a more relaxed story, and that tension is worth naming. The borrow rate has fallen sharply — down roughly 48% over the past month to 0.52% — and availability is generous, well above 100% of short interest. That combination means new short positions remain cheap and easy to put on, which partly explains how shorts rebuilt so quickly. There is no squeeze pressure here; the infrastructure for a sustained short position is intact. Options positioning adds another wrinkle: the put/call ratio is 0.27, actually sitting slightly below its 20-day average and near its 52-week low. Options traders, in other words, are not aggressively buying downside protection — a notable divergence from the shorts' renewed conviction.
The Street is largely sitting on the sidelines. Every analyst in the coverage universe carries a Hold-equivalent rating. The most recent round of target changes, from late January and mid-February, showed a split between those nudging targets higher (RBC Capital raised to $63, Truist to $57, BMO to $60) and those cutting (Morgan Stanley trimmed to $45, TD Cowen to $46). At the current price of $56.60, the stock is already above several of those targets. The bull case — improving operational efficiency, professional-channel strength, and progress toward 2027 margin goals — runs directly into the bear case: slow margin recovery, persistent competitive pressure, and a stock that has arguably already priced in much of the good news. Factor scores echo the ambivalence: EPS momentum ranks in the 81st percentile over 30 days and the dividend score is strong at 80, but the EV/EBIT rank sits in just the 15th percentile and days-to-cover ranks in the 10th, flagging valuation and covering-risk concerns simultaneously.
Institutional ownership adds context. T. Rowe Price added 1.26 million shares in Q1, making it the most aggressive large-holder buyer in the recent filing period with a stake of 13.6%. American Century also added meaningfully, taking on 439,000 shares. BlackRock, the largest holder at 14.8%, made a more modest addition. Those institutional inflows give the bulls a structural support argument — but they also took place before the shorts rebuilt so decisively this past week.
Recent earnings reactions have been mixed. The last confirmed print in February produced a 5.4% one-day gain but the five-day follow-through was a modest 1.6%. The prior release saw a 2.5% one-day loss and a 4% five-day decline. The pattern is inconsistent, and with shorts now back above 19% of the float, the setup for May 20 is one where the direction of the initial reaction could matter considerably for how positioning unwinds. What to watch between now and then: whether short interest holds above 19%, whether the borrow rate ticks back up as more lenders get used, and whether options traders begin to close the gap with the short sellers — or remain conspicuously unbothered.
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