What happened

Shares of YETI Holdings (YETI -1.65%) gained 26.1% in March, according to data from S&P Global Market Intelligence. The thermos and cooler company's stock gained ground as continued momentum from the fourth-quarter earnings beat that the company delivered in February helped to trigger a short squeeze

YETI Chart

YETI data by YCharts.

YETI stock gained 41% in February following an earnings beat and guidance that suggested strong demand for the business' products. The company's shares then attracted even more short interest. But increased bullish momentum following the strong earnings performance and encouraging guidance forced short-sellers to cover their positions. 

A Yeti portable cooler.

Image source: Yeti. 

So what

YETI had its initial public offering last October, and the stock's subsequent rally attracted enough attention to make the company one of the most shorted on the market. Short interest hit roughly 68% of the stock's float on Feb. 28, but March didn't bring the pricing reversal that bears were anticipating. Continued momentum for YETI stock forced short-sellers to cover their positions, creating even more momentum for the cooler maker's share price. 

While it does not appear to have had a significant impact on stock performance last month, YETI did unveil new color offerings for a range of products and a new product line: the Rambler 24-ounce mug for keeping beer cold.

Now what

YETI's products are generally highly regarded, and the company seems to be gaining brand strength in its core product categories. It's not clear that the company has a moat outside of that brand strength, but the business does have feasible avenues to long-term growth if it can continue to deliver quality thermos and outdoor products, leverage and build on its lifestyle-brand status, and strengthen its direct-to-consumer retail business. 

Shares trade at roughly 30 times this year's expected earnings.