COST fell nearly 8% in the week after earnings. Now two of the three signals that fired during the selloff are reversing fast.
The cost to borrow has plunged 57% in one week to just 0.16% annualised — the lowest level since mid-May. That is not a rounding error. It reflects a rapid evaporation of borrow demand among short sellers who positioned into the earnings print and have since covered or stood down. Availability remains extraordinarily loose, with over 312 million shares available to borrow. There is no lending market stress here whatsoever.
Short interest climbed roughly 11% in the week before earnings to 1.68% of the free float — the fastest weekly build in over a month. That move coincided with the stock's 7–8% decline and preceded the May 28 print. Since then, the rate of accumulation has flattened. At 1.68% of float, the absolute level remains low. This is not a crowded short. The build looks more like tactical pre-earnings positioning than a structural bearish thesis taking hold.
The put/call ratio has continued sliding. It now sits at 1.07 — nearly two standard deviations below its 20-day mean of 1.25 and well off the 52-week high of 1.40 reached in late May. Options traders rotated hard into calls after the selloff. That rotation has not reversed, even as the stock recovered only modestly to $972.
The signal is consistent with the previous note from June 3: the options market is not hedging further downside. It is leaning the other way.
The Street has not flinched. TD Cowen reiterated Buy with a $1,175 target on June 3. B of A Securities raised its target to $1,200 on May 29. UBS sits at $1,275. The consensus remains Buy, with the current price implying meaningful upside to most published targets. DA Davidson holds out at Neutral with a $1,000 target — just above current levels.
That spread matters. The stock at $972 trades at a P/E of roughly 45x. Bulls argue the membership model and Kirkland brand justify premium multiples. The bear case, per Benzinga's framing, centres on slowing membership growth and margin compression — precisely the detail Truist flagged post-earnings.
The next earnings event is June 11. Options positioning, a collapsing borrow cost, and analyst targets averaging well above $1,100 all point in the same direction. Whether the June print resolves the valuation debate — or restarts it — is the only question that matters right now.
Key data (as of June 4–5, 2026)
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