Stories are generated from ORTEX data and reviewed by the ORTEX team. How we publish
RMD heads into its October 29 earnings call with options traders more cautious about downside than at almost any point in recent memory, even as short sellers hold a sizable but essentially static position.
The starkest signal this week is in options. The put/call ratio has climbed to 2.70, more than 2.6 standard deviations above its 20-day average of 2.38, placing it at the most defensively skewed reading in over a year. That kind of options-market anxiety, with puts outnumbering calls by nearly three to one, typically reflects either genuine hedging ahead of a catalyst or a crowding of protection buyers around a sentiment overhang. For RMD, both explanations apply: earnings land in 22 days, and GLP-1 drug adoption has been a persistent topic for anyone short on conviction in sleep apnea device volumes.
Short interest is meaningful but not what's moving this week. At 9.2% of the free float, representing roughly 13.5 million shares, the position has risen about 6% over the past month but barely budged in the last five days. Borrow remains straightforward: cost to borrow is around 0.50%, and availability is running at 368% of the short interest level, meaning there are well over three shares available to borrow for every one already shorted. That is a loose borrow market, with no sign of squeeze dynamics. The ORTEX short score of 64.8 has drifted only marginally over the past two weeks, consistent with a position that is being maintained rather than aggressively built.
The Street is divided but leaning constructive, with the division centring on where the stock will grow rather than whether it will. The most notable recent move came from RBC Capital, which upgraded RMD to Outperform on September 15 and lifted its target to $262, a reversal of its prior cautious stance. Keybanc also raised its target to $267. Against that, Piper Sandler sits at Neutral with a $225 target, and Wells Fargo is at Equal-Weight with a target of $215, the latter sitting marginally below the current $220.69 price. The mean analyst target of $246 implies roughly 11% upside from current levels. The bull case centres on 62.3% gross margins, mask-sales growth running at 16% year-over-year, and forward EPS momentum ranking in the 80th percentile over 90 days. The bear case is more structural: management trimmed FY26 device segment growth guidance to mid-single digits from high-single digits after the August quarter, international device sales disappointed, and the theoretical long-term threat from GLP-1 drugs remains unresolved in investors' minds. The EV/EBITDA multiple has compressed modestly over the past 30 days, falling about 0.2 turns to 13.1x, while the price-to-book at 4.2x has also eased. Those are mild moves, not a re-rating, but they track the softer tone from the August print.
Insider activity adds limited new information this week. The 90-day net insider position is negative, with roughly $5.3 million in net selling, but the transactions in the record are all under pre-arranged 10b5-1 plans. CEO Michael Farrell exercised and sold shares in both August and early September under that plan structure, as did director Peter Farrell. Mechanical plan sales are a weaker signal than discretionary selling, and the August awards of restricted stock to the CEO and CFO are compensation grants, not market purchases. None of this changes the story materially. The broader ownership register shows passive accumulation: BlackRock added around 78,000 shares in the most recent period, and First Trust added over 740,000, while Vanguard's aggregate holding appears largely stable across its two reported entities. AustralianSuper, with a 5.7% stake filed in August, is a notable long-term holder and carries no activist intent per the 13G/A filings on the register.
Earnings history offers one useful data point. The last two prints produced next-day losses of 1.4% and 5.4% respectively, with both recovering modestly over the following five days. The options market's defensive positioning heading into October 29 is consistent with that recent pattern of initial negative reactions.
With the put/call ratio at its most extended level in over a year, short interest firm at 9% of float, and analyst opinion bifurcated between those who believe management's guidance reset is now in the price and those who see structural headwinds from GLP-1 adoption, the tension heading into the October 29 print is less about whether RMD grows and more about whether the guidance floor holds.
See the live data behind this article on ORTEX.
Open RMD on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
