The shares of Payment Data Systems, Inc. (NASDAQ:PYDS) are surging, after Barrington Research initiated coverage with an "outperform" rating and $5 price target -- a 123% premium to last night's close. The brokerage firm called PYDS "an undiscovered micro-cap stock with a disruptive technology application in the payment facilitator platform."
In reaction, PYDS stock has shot up 11.2% to trade at $2.51, putting it on track for its best day since March 6. The shares hit a 14-month low of $1.38 on Dec. 31, but spent most of 2018 bouncing between support at $1.60 and resistance around $2. By year's end, they had shed 37.8% over the 12-month time period, but are up 51.8% so far in 2019.
Barrington's bullish outlook on Payment Data Systems isn't new, with 100% of those in coverage already maintaining a "buy" or better rating on the stock. Plus, the average 12-month price target of $4.50 is a 78.6% premium to current trading levels.
Short sellers, meanwhile, have been exiting their positions for most of the last year. Short interest is down 60% from its mid-March peak, and now accounts for just 2.3% of PYDS stock's available float. However, it would still take bears more than a week to cover their remaining bets, at the equity's average daily pace of trading.