(CNN) -- Rite Aid is having quite a happy holiday. The company's stock has nearly tripled in 9 days after the drug store shocked investors with much-better-than-expected earnings.
The stock was up 15% Friday, soaring above $22 a share. On December 18, a day before the company announced its third-quarter earnings, Rite Aid was trading at just $8.32 a share.
Rite Aid swung to a surprise profit in its last quarter, and Wall Street analysts severely underestimated the company's earnings. Rite Aid's adjusted profit was nearly eight times higher than analysts' expectations, boosted in particular by strong pharmacy sales. The company credited explosive growth in Medicare Part D membership as an increasingly large number of Baby Boomers sign up for government health care.
But front-of-store sales were better than expected too, growing 1% in the past quarter. Among the biggest contributors to the company's sales growth was Thrifty brand ice cream, which Rite Aid purchased in 1996. The company recently expanded the number of stores that sell Thrifty by 900.
The stock soared 42% on December 19, the same day it reported stellar earnings. But the stock has continued to rise every day since — 18.5% on the 20th, 7% on Monday, 7.5% on Tuesday, 19% Thursday and another 15% Friday.
The meteoric rise is because Rite Aid is one of the most shorted stocks on the market. More than 29% of the company's shares have been shorted, according to Refinitiv. Short-sellers, who bet that the stock will fall, have probably been buying the stock to cover their bets.
That has put Rite Aid on pace for its best month since April 2009. The stock's rise has also turned a deeply negative year into a very positive one: Rite Aid is up nearly 56% for the year. The day before it reported earnings, Rite Aid had been down 41% in 2019.
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