Short Interest: 34%
Analyst Predicted Upside: 42%
For Fusion-io (FIO), short sellers — whose bearish bets represent 34% of the stock’s float — have been right so far this year. The cloud company, which came public in the summer of 2011, has shed 28% since 2013 kicked off, putting FIO’s current price at less than half its 52-week high.
But look at Fusion-io’s short interest, it’s pretty obvious the bears still think FIO has more room to tumble.
Analysts sure seem to think things can’t get much worse. Their bullish calls have largely been in response to the tumble short-sellers predicted for FIO. On June 17, Needham initiated a “buy” rating on the stock after it had already lost 42% year-to-date. In prior months, UBS and Stifel both upgraded the beaten-down stock to a “buy,” from ratings of “neutral” and “hold,” respectively.
Nonetheless, a consensus target of $20 is a risky bet on a big snap-back, especially considering the stock still trades at a rich valuation of 56 times earnings on expected annualized growth of 26%.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities. Follow her on Twitter at @alyssaoursler.