MMSI Shorts Build Ahead of Q3 Print

Merit Medical Systems heads into its October 29 earnings release with short sellers adding positions steadily and options traders showing the most defensive tilt in months.

The clearest shift heading into the print is in short interest. Bears have built their position for four consecutive weeks, pushing the SI % of free float to 6.6%, up roughly 11% over the past month. The pace has accelerated: ORTEX estimates a further 2.3% daily rise on October 26 alone, taking short shares to just under 3.9 million. That said, the borrow market is not under stress. Availability is extremely loose at 1,598%, meaning for every share already borrowed, around sixteen remain available to lend. Borrowing costs are correspondingly low at 0.49%, easing about 5% over the past week. The lending setup does not suggest a squeeze is forming, just a methodical build in bearish conviction. Options are more pointed: the put/call ratio has jumped to 0.82, more than 1.25 standard deviations above its 20-day average of 0.61. That is the most defensively positioned the options market has been in several months, well above the mid-October lows near 0.39.

The bull and bear debate centres on execution durability rather than the top line. Bulls point to Merit's stated trajectory toward a 21.2% operating margin and $634 million in cumulative free cash flow through 2026, above its own $400 million target, underpinned by a gross margin that the company has been expanding as the Therapeutic Products mix grows. Analysts who lifted targets after the Q2 print, including JPMorgan, Piper Sandler, and BTIG, hold price targets ranging from $95 to $106, above the current $93.53. The consensus mean target is $101.64, implying around 9% upside from here. Bears counter that revenue growth at or below 5% would signal acquisition drag and stalled new product traction, which would compress margins rather than expand them and make the current multiple hard to defend. A 13x P/E framework on 2027 estimates underpins the bear scenario, compared with the trailing PE running near 20.5x today.

The stock has recovered well in recent weeks, up nearly 7% over the past month, though it slipped 0.7% on October 27. The most comparable recent print was Q2, reported July 30, when the stock gained 5.2% on the day and extended that to 8.5% over the following week. The pattern of rewarding beats is intact, which may explain why short sellers are building defensively into a print rather than pressing an outright down-trade. BlackRock, the largest reported holder at roughly 15.9% of shares per its most recent institutional data, has been adding, with a 630,000-share increase disclosed as of September 30.

Wikipedia attention for Merit Medical spiked sharply in mid-October, with ORTEX's retail-attention signal hitting a z-score of 6.7 against the company's own 90-day history. That kind of spike often reflects event-driven interest rather than an organic change in sentiment, and with earnings one day away, the timing fits. The print will test whether the company's margin progress and Therapeutic Products mix shift are sufficient to sustain the multiple at which the stock is now trading after a strong quarterly recovery.