Open Text short sellers are surely getting squeezed today, as the stock has surged more than 11% following strong quarterly earnings. For the quarter, OTEX recorded net income of $7.8 million, or 15 cents per share. Revenue rose to $164 million from $101.2 million a year earlier. On a non-GAAP basis, OTEX earned 43 cents per share, topping the analyst expectation for earnings of 36 cents per share.
The stock has received a glut of analyst attention today, with no less than 8 brokerage firms lifting their price targets on the stock to the $35 to $40 per share range. Furthermore, OTEX was upgraded by 1 analyst and downgraded by 2 more. But investors seemed to ignore the warnings from the 2 downgrades, pushing the stock sharply higher, much to the chagrin of short sellers. Heading into the report, more than 30% of OTEX's float was sold short, providing ample fuel for a sharp short-covering rally as these bears bough back their positions to end the pain to their portfolios.