AcelRx Pharmaceuticals Stock Surging on Analyst Bull Note

Short interest fell more than 3% over the past two reporting periods

Managing Editor
Jun 12, 2018 at 10:06 AM
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Pain specialist AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) is up 3.4% at $3.78 in early trading, after Cantor Fitzgerald initiated coverage on the stock with an "overweight" rating and price target of $6 -- which represents a nearly 59% premium to current levels. The brokerage firm said ACRX stock has been "overlooked by investors," while the company has "positioned itself as a potential disruptor in the treatment of medically supervised acute pain."

Ahead of last night's initiation, analyst attention had been light for AcelRx stock, with only three brokerages in coverage as of the close. The attention has been mostly optimistic, however, as two the three firms following the pharma name sport a "buy" or better rating. This is complimented by the stock's average 12-month price target of $5.13 -- a 35% premium to the equity's current price.

ACRX has been on the rise since a mid-March post-earnings surge, and is now up 85% year-to-date. More gains could be in store should shorts continue to cover. While short interest fell 3.3% the past two reporting periods, these bearish bets still represent over 8% of the stock's total available float. At AcelRx stock's average daily trading volume, it would take over seven days for shorts to buy back their bearish bets.

Those wanting to bet on more upside may want to consider doing so with options. The equity currently sports a Schaeffer's Volatility Index (SVI) of 93%, which ranks in the 18th percentile of its annual range. This suggests that near-term options are pricing in relatively low volatility expectations at the moment, which could help maximize the benefit of leverage for premium buyers.

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