The latest edition of the Short Interest Monitor is dominated by pharmaceutical companies and enterprise software firms but also features a diverse mix of other businesses.
Brinker International (EAT), the owner of restaurant chains Chili's and Maggiano's Little Italy, is a prime example. EAT shares have soared roughly 60% year to date due in part to strong comparable-store sales growth and bullish Wall Street stock ratings. However, short sellers still targeted the company in early August amid valuation concerns, persistent increases in food and labor costs, and insider selling. EAT had relatively strong earnings in its fiscal fourth-quarter report on August 12, topping analysts' revenue forecasts and providing upbeat forward guidance. But the results were driven by strength at Chili's, while Maggiano's reported a traffic slump and declining sales. With its current price-to-earnings ratio sitting roughly 40% above the five-year average, investors are counting on continued momentum at Chili's to offset Maggiano's issues.
The enterprise software company monday.com (MNDY) was also in short sellers' crosshairs earlier this month. MNDY announced plans to cut 20% of its workforce in late July amid its transition into an "AI work platform." The company beat consensus earnings and revenue estimates in its second-quarter earnings report on August 10, as its AI-related annual recurring revenue doubled sequentially. However, overall revenue growth decelerated, and forward guidance pointed to a further slowdown ahead. Valuation concerns may also be attracting short sellers. MNDY trades at roughly 40 times its trailing 12-month earnings.
Cipher Digital (CIFR) saw its short interest surge in the first two weeks of August as well. The bitcoin miner turned data center infrastructure firm missed consensus earnings and revenue forecasts in its second-quarter earnings report on August 4. CIFR posted a wider-than-expected net loss of nearly $268 million in the quarter, while revenue fell to just $24.8 million. Although CIFR expects to complete construction on multiple major data centers over the next year—a milestone that should bolster future earnings—valuation concerns and execution risk may be drawing in short sellers.
The table below shows the complete Short Interest Monitor, which features 10 equities with elevated and rising short interest. Each stock has a market cap of at least $2 billion and short interest that represents at least 10% of its outstanding shares.
Short interest as a % of shares outstanding