DPZ shorts ease but remain elevated at 9.6% of float

Domino's Pizza heads into the final week of May carrying the weight of a brutal earnings print and a stock that has shed 16% in a single month — the central question now is whether the worst of the short-selling pressure is behind it, or simply taking a breather.

Short sellers built aggressively into the late-April earnings report, driving SI as a percentage of free float from around 6.6% in early March to a spike above 11.5% in mid-April. Since then, the position has unwound meaningfully — currently at 9.6% of float — though that is still nearly 50% higher than where it stood before the negative sentiment cascade began. The one-week change is a modest +0.3%, suggesting the selling of shorts has stalled rather than accelerated. Borrow costs tell a more animated story: cost to borrow has climbed 43% over the past week to 0.46%, the sharpest weekly move in the 30-day window, even if the absolute level remains low. Availability is wide at 513%, meaning there is ample supply in the lending market for new short-sellers who want in. The borrow market reads as rebuilding interest rather than a squeeze.

Options positioning has cooled dramatically from the peak defensiveness seen in late April. The put/call ratio ran above 2.0 in late April — the 52-week high was 2.21 — but has since normalised to 1.05, barely a third of a standard deviation above its 20-day mean of 1.02. That retreat in hedging demand is consistent with the short-side unwind, though both metrics have stabilised rather than fully reversed. The ORTEX short score is a mild 52, placing DPZ in the middle of the universe on short pressure — elevated enough to flag, but not the screaming red signal it was a month ago.

The Street has done a near-uniform post-earnings reset. After Q1 results on April 27 sent the stock down 7.4% on the day and 10.2% over the following five days, practically every major house trimmed targets while keeping ratings unchanged. Goldman Sachs cut from $480 to $430 but held its Buy. JPMorgan moved from $440 to $430 while staying Overweight. Citi lowered from $425 to $365 at Neutral. Barclays, the house most sceptical, trimmed to $315 — almost exactly where the stock is trading today. TD Cowen's action this morning is the freshest read: it lowered its target to $350 from $377, maintaining Hold. The mean consensus target now stands at $404, implying roughly 30% upside from $310 — but that figure incorporates several targets set before the sell-off and should be read with caution. The bull case rests on brand strength, the majority-franchised model, and international growth optionality. Bears point to slowing US same-store sales, limited pricing power, and consumer confidence headwinds that are structurally harder to resolve in a single quarter.

The institutional picture adds one notable detail. FMR (Fidelity) is the largest holder at 10.2% and added 1.39 million shares in the April reporting period — a meaningful increase made into the weakness. Soroban Capital Partners entered as the second-largest holder with 2.5 million shares, a new position as of March 31. That is a concentrated active-manager bet of 7.5% of shares at a time when the stock was already under pressure. Whether that conviction holds through a second quarter of softness is the ownership question worth tracking. Factor scores offer limited additional encouragement: EPS momentum over 30 days ranks in just the 26th percentile, though the 12-month forward EPS year-on-year growth reading scores in the 98th percentile — a tension between near-term estimate cuts and still-robust longer-horizon expectations.

No next earnings event is currently confirmed. With the stock trading near Barclays' bear-case target, the borrow cost ticking up even as short interest eases, and fresh institutional buying sitting unrealised, the next meaningful datapoint is a same-store sales update or a management guidance revision — whichever arrives first.