Shoe Carnival Stock Set to Soar After Earnings Yet Again

SCVL stock has a history of huge earnings wins

Footwear retailer Shoe Carnival, Inc. (NASDAQ:SCVL) is set to gain 12% at the open following the company's third-quarter earnings results. Earnings and revenue both topped expectations for the period, while same-store sales increased by 4.5%. Wedbush and Susquehanna were impressed, enough to raise their respective price targets to $47 from $42.

To be sure, SCVL isn't one of the most closely watched stocks on Wall Street, but the shares have certainly rewarded the bulls that have stayed behind it. The equity was already up nearly 90% over the past year, and it touched an all-time high of $45 back in August. Helping along the way has been a series of positive earnings reactions like what we're expected to see today. In fact, the stock has made a single-day double-digit percentage move to the upside after earnings in five of the past six quarters, today not included.

Considering this, we may see additional bull notes for Shoe Carnival in the near future. Half of the analysts tracking the shares have just "hold" ratings, and the average 12-month price target of $43.25 sits below the August peak.

It will also help if short sellers begin to cover their positions. These bears control a brow-raising 36.2% of the security's total float, and if you go by the average daily trading volume, it would take them more than 11 sessions to buy back the shares. As such, there's plenty of fuel for a short squeeze.

Meanwhile, options volume has been light for SCVL on an absolute basis, but the activity that has occurred has revealed a clear put bias. Most notably, the Schaeffer's put/call open interest ratio (SOIR) stands at 1.14, ranking in the 82nd annual percentile, showing near-term options traders have targeted puts over calls at an unusual pace. A shift in sentiment among these traders could also help the shares.