RMD heads into the first week of June under mounting pressure — the stock down 12% in seven days, short interest hitting a six-week high, and options traders the most defensively positioned in months.
The short-side build is the clearest signal right now. SI % of FF climbed from 7.7% at the start of May to 9.5% by June 2 — a 24% increase in one month and the highest reading in the data window. The most striking acceleration came in the final week of May: shorts added roughly 1.5 million shares between May 25 and June 2, pushing the weekly change to +13.5%. That kind of single-week jump is meaningful for a $26B company and reflects deliberate positioning, not noise.
Options are adding to the defensive picture. The put/call ratio has run above 1.95 for most of the past week, well above its 20-day average of 1.55. That's not an extreme by RMD's own history — the ratio touched 3.4 in late April — but the sustained elevation suggests demand for downside protection is a persistent feature right now rather than a one-day spike. One important counterpoint: borrow conditions remain relaxed. Cost to borrow is just 0.49%, and availability is at 304% — meaning there are roughly three times as many shares available to lend as are currently borrowed. There is no technical squeeze pressure here. Shorts can enter and exit freely, which makes the build look like conviction rather than a trapped position.
The Street is divided, with a notable gap between where analysts see value and where the stock is trading. The consensus target published around May 1 was $270.60, against a current price of $182.82 — an implied 48% upside that reflects a wide bull-bear split rather than analyst confidence. Bulls point to strong mask sales growth of 16% year-over-year, a 62.3% gross margin that beat consensus, and a recurring software revenue base that is increasingly insulated from device-cycle volatility. Bears focus on management cutting the FY26 growth outlook from high-single-digit to mid-single-digit percentage growth, weak out-of-US device sales, and the structural worry that GLP-1 weight-loss drugs reduce the addressable sleep-apnea population over time. On the analyst action front, post-earnings moves were mixed: RBC raised its target to $321 while maintaining Outperform, but Wells Fargo trimmed from $270 to $227 while staying Equal-Weight. KeyBanc also edged its target lower. The direction of travel for targets is down, even among the bulls. Valuation multiples have compressed with the stock: the P/E has fallen roughly 2.4 points over 30 days to 15.8x, and the P/B ratio has dropped around 0.6 points to 3.7x.
Insider activity over the past 90 days is worth noting, though the read is nuanced. The net 90-day flow is a seller of roughly $6.2 million in aggregate, with CEO Mick Farrell executing near-identical monthly sells of around 4,991 shares — a pattern consistent with a programmatic trading plan rather than discretionary judgment. The CFO and the founder-chairman emeritus have also sold in small amounts. None of the trades carry a significance score above 2 out of 10, and the regularity argues against reading them as a bearish signal.
With the next earnings call scheduled for July 30, the setup to watch is whether the short build pauses or extends — and whether the options market, which has been consistently more defensive than usual since late May, begins to price an even wider tail.
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