ResMed heads into its July 30 earnings print with an unusual backdrop: the stock has rallied 13% in a month yet analysts keep trimming their targets, short interest is near a 30-day high, and the options market shows an entrenched put-heavy structure that hasn't budged despite the price recovery.
The positioning picture is the most striking part of the setup. Short interest has climbed to 9.3% of free float — a genuinely elevated level for a large-cap medtech — and edged up another 0.2% on the week despite the stock's strength. That means shorts are not fleeing into the rally; they're holding. Borrow remains cheap at 0.53%, barely changed on the week, and availability is comfortable at 224% of current short interest, so there's no squeeze mechanism building. The options market reinforces the defensive tilt: a put/call ratio of 1.98 sits fractionally below its 20-day average of 2.03, meaning this level of hedging has been the baseline for weeks, not a fresh spike. The ORTEX short score has drifted up to 68, its highest point of the past two weeks, and ranks in the 8th percentile for the sector — a reminder that bearish data-flow has been persistent.
The Street is telling a more cautious story than the price action might suggest. Two analyst moves landed today alone. RBC Capital maintained its Outperform rating but cut its target sharply from $321 to $276, while Wells Fargo trimmed its Equal-Weight target a notch from $227 to $225 — now just 2.5% above the current $219.75 close. Morgan Stanley's mid-June downgrade to Equal-Weight with a $230 target is the most significant structural shift, moving a bellwether firm to the sidelines amid concerns about reduced FY26 growth guidance. The bear case centers on management guiding the segment to mid-single-digit growth versus a prior high-single-digit target, soft international device volumes, and the long-run shadow of GLP-1 drugs potentially compressing the sleep apnea addressable market. The bull case rests on 62.3% gross margins beating consensus, EPS at $2.81 above estimates, and mask sales growing 16% year-over-year. With the mean analyst target now at $257 — roughly 17% above the current price — the Street's aggregate view still sees upside, but that number is being pulled lower with each passing week.
The insider record adds a layer of texture. CEO Mick Farrell has sold 4,991 shares in each of the past four months on what appears to be a regular schedule — at prices ranging from $193 to $273 — and CFO Brett Sandercock sold in both March and April. The 90-day net position across all insiders works out to a net sell of around $3.86 million in value. These are small relative to the float and the pattern looks programmatic rather than conviction-driven, but it means there has been no insider buying into the weakness that preceded this month's rally.
The earnings history adds one more element worth tracking. The most recent print on April 30 produced a 3.3% one-day drop and a further slide to minus 2.4% over five days. The prior quarter saw a smaller one-day fall of 1.0% but a 3.7% five-day decline. In both cases, the stock gave back ground after reporting, even when the headline numbers were decent. The July 30 event is close enough that options positioning and short interest levels over the next three weeks will be the clearest signal of how the market is tilting into the number — and right now, the combination of elevated short interest holding steady through a rally, a PCR entrenched above 1.95, and a series of analyst target cuts is less a sign of conviction either way than a market waiting to see whether the growth-outlook narrative changes.
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