RMD Short Sellers Retreat After July Print

ResMed enters its August 6 earnings report with the short position that built into July's print now unwinding fast — a meaningful shift from the setup just one week ago.

Short interest has dropped 10% in a single week, falling from around 14.8 million shares to 13.3 million, bringing the float exposure down to 9.1% from the 10.1% recorded ahead of the July 30 release. The stock fell roughly 1.5% on that print's day-one reaction, and shorts have been covering since. Borrow conditions remain relaxed — availability has loosened to 277% of short interest, up nearly 12% on the week, meaning there are nearly three shares available to lend for every one already shorted — and cost to borrow sits at just 0.52% annually. The lending market imposes no friction on either side of the trade.

Options tell a strikingly different story. Hedging demand has collapsed. The put/call ratio has fallen to 1.07, almost two standard deviations below its 20-day average of 1.75 — near the 52-week low of 1.02. For most of July the PCR was running between 1.9 and 2.4; the reversal over the past two sessions is sharp. That shift coincides with an 8% rally in the stock over the past week to $210.98, suggesting call-side activity has picked up materially into the next print.

Analysts have been moving in one direction ahead of this report: down. Citigroup downgraded to Neutral in mid-July, cutting its target from $270 to $235. Mizuho trimmed to $220 while holding Outperform. RBC made the largest single cut, slashing its target from $321 to $276. The consensus mean now sits at $248 — roughly 18% above the current price — but the direction of recent revisions is uniformly cautious. The bull case rests on ResMed's 62%-plus gross margins, strong mask-sales growth running at 16% year-over-year, and EPS momentum that ranks in the 92nd percentile on a 30-day basis. Bears focus on the lowered FY26 device growth outlook, international device revenue missing expectations, and the unresolved structural question of whether GLP-1 adoption shrinks the diagnosable sleep apnea pool over time. EPS momentum is strong, but the 12-month forward earnings growth factor ranks in only the 30th percentile — the market is not pricing in acceleration.

The August 6 print will test whether the July quarter's margin story was a one-quarter result or the start of a durable re-rating, and whether management's guidance language on GLP-1 headwinds has changed enough to justify the week's sharp options repricing.