Sterling Infrastructure enters the back half of May with a rare convergence: short sellers in staged retreat, options traders flipping distinctly bullish, and analysts racing to catch up with a stock that just posted one of the most violent earnings reactions of the year. The question now is how much further the repricing has to run — and who is left on the wrong side.
The earnings print on May 5 was the catalytic event. The stock surged roughly 51% the next session and held nearly all of those gains over the following week, closing this week at $783.53, up 7.6% on the week and 57.6% over the past month. Those are not numbers that happen to a construction company in a quiet quarter. The market was caught wrong-footed at scale, and the positioning data tells exactly that story.
Short sellers have been unwinding steadily since the print. Short interest as a percentage of the free float peaked around 7.3% in late April and has fallen to 5.9% — a drop of nearly 1.5 percentage points in roughly three weeks. That is a meaningful retreat, not a rounding error. In absolute terms, shorts have covered around 435,000 shares since early May. The borrow market is reflecting this exit. Availability now sits at approximately 1,970% — nearly twelve times where it was on May 5, when the squeeze was at its tightest — suggesting an ample supply of stock has become available as longs took profits and shorts returned borrowed shares. Cost to borrow has stayed benign throughout at 0.44%, confirming there is no residual stress in the lending market. The ORTEX short score has drifted from 44 to 41 over the past two weeks, consistent with a positioning landscape that is cautious but no longer actively crowded.
Options traders have pivoted sharply to the bullish side. The put/call ratio closed at 0.69 — nearly 1.8 standard deviations below its 20-day average of 0.93. For most of May, the PCR was running above 1.0, meaning puts dominated; the sudden rotation to call-heavy positioning after the earnings spike signals that options buyers are now expressing upside conviction rather than hedging downside. At 0.69, the PCR is close to the lower end of its 52-week range (0.29), which underlines how sharply sentiment has flipped.
Analysts have had to move fast. Cantor Fitzgerald doubled its price target to $956 after the print, while Keybanc followed with a raise to $889. Both maintain Overweight ratings. The mean Street target currently sits at $762 — below the current price of $783 — which means the stock has already run through consensus and is trading on revised expectations rather than catching up to them. The bull case centres on Sterling's exposure to data centre infrastructure and semiconductor facility construction, with strong backlogs and expanding margins cited as evidence of durable pricing power. Bears flag customer concentration, execution complexity in Northeast markets, and inflationary pressure on labour. The EPS momentum picture is exceptional: 30-day and 90-day factor ranks hit 97 and 96 respectively, placing Sterling at the top of the universe on forward estimate revisions. The PE has moved to roughly 39x and EV/EBITDA to 26x — expensive for a construction name, but the market is clearly pricing in a sustained growth premium.
Insider selling is worth watching as context rather than as a contrarian signal. CEO Joseph Cutillo has sold around 150,000 shares since late February for total proceeds approaching $90 million, most recently offloading 50,000 shares at $497 on April 23 — well before the earnings surge. The selling looks like orderly planned disposals rather than conviction-driven exits at peak valuation, though the pattern will warrant attention if it continues at current prices. Peers FIX and ECG each gained around 2% this week, and WSC added 7.4% — steady moves, but none matching STRL's trajectory, reinforcing the stock-specific nature of the re-rating.
The next earnings event is scheduled for August 3. Between now and then, the key question is whether the analyst community revises targets above the current price level — several firms are lagging — and whether short sellers who have already partially covered resume pressure at higher prices, or retreat further.
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