Hedgeye Adds ResMed to Short Ideas List Citing Competitive Pressure

Research firm Hedgeye Potomac Research added medical device manufacturer ResMed to its short ideas list on June 11, 2026. The firm’s analysts cited intensifying competitive threats from the growing adoption of GLP-1 agonist drugs, which are used for weight loss and type 2 diabetes. ResMed’s stock closed at $181.50 on the day of the announcement, down 2.1% for the session. The company’s market capitalization stands at approximately $27 billion.

Context — [why this matters now]

ResMed is a dominant player in the sleep apnea treatment market, with its CPAP machines and masks generating the bulk of its revenue. The core investment thesis for the stock has long been tied to the high global prevalence of obstructive sleep apnea, a condition often linked to obesity. The catalyst for the bearish call is the accelerating prescription rate for GLP-1 drugs like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound. These medications promote significant weight loss, which can reduce the severity of or even resolve sleep apnea in some patients, thereby diminishing the need for CPAP devices.

This shift represents a fundamental challenge to ResMed’s long-term growth narrative. The last major threat to the company’s business model was the recall of Philips’ competing respiratory devices in 2021, which provided ResMed with a multi-year market share windfall. That tailwind is now subsiding as Philips works through its recall remediation efforts. The current macroeconomic backdrop of elevated interest rates also pressures high-multiple growth stocks like ResMed, making them more vulnerable to negative fundamental news.

Data — [what the numbers show]

ResMed’s financial metrics illustrate the scale of the business now under scrutiny. The company reported revenue of $4.3 billion for its 2025 fiscal year. Its gross margin remains strong at 56.5%, a characteristic of its hardware and recurring consumables sales model. However, the stock trades at a forward price-to-earnings ratio of 23x, a premium to the broader S&P 500 healthcare sector average of 18x. This premium valuation leaves little room for earnings disappointment.

A key data point fueling the short thesis comes from clinical trials. A study published in 2025 demonstrated that tirzepatide, the active ingredient in Zepbound, led to a reduction in the severity of sleep apnea by up to 63% in participants with obesity. This directly impacts the total addressable market for CPAP devices. ResMed’s U.S. sales, which account for over 50% of revenue, are considered most exposed to the GLP-1 trend due to higher drug adoption rates.

Metric	ResMed (RMD)	S&P 500 Health Care Sector
Forward P/E Ratio	23x	18x
YTD Performance	-12%	+5%

Analysis — [what it means for markets / sectors / tickers]

The bearish call on ResMed implies a correspondingly bullish outlook for pharmaceutical companies leading the GLP-1 market. Novo Nordisk and Eli Lilly are the primary beneficiaries, as increased awareness of their drugs’ secondary benefits could expand their prescribing labels and patient populations. Medical device distributors like Henry Schein could see a mixed impact, losing some respiratory device sales but potentially gaining from increased demand for supplies related to injectable drugs.

A key counter-argument to the short thesis is that GLP-1 drugs are expensive, face reimbursement hurdles, and require long-term adherence to maintain weight loss. Not all sleep apnea cases are obesity-related, preserving a core patient base for ResMed. The market positioning shows hedge funds increasing short interest in RMD, which had risen to 3.5% of float prior to the Hedgeye announcement. Long-term institutional holders, however, may be slower to divest, creating a potential battle over the stock’s direction.

Outlook — [what to watch next]

The next significant catalyst for ResMed is its quarterly earnings report scheduled for July 24, 2026. Analysts will scrutinize new patient growth metrics and management commentary on competitive pressures. Any guidance revision for fiscal 2027 will be critical for the stock’s trajectory. Investors should monitor prescription data trends for GLP-1 drugs, with monthly pharmacy benefit manager reports serving as a leading indicator.

Key technical levels to watch include the stock’s 200-day moving average near $195, which now acts as resistance. A sustained break below the $175 support level, which held in May 2026, could signal a further leg down. The direction of 10-year Treasury yields will also influence the stock, as higher rates typically compress the present value of future earnings for growth-oriented companies.

Frequently Asked Questions

How do GLP-1 drugs like Ozempic affect sleep apnea?

GLP-1 receptor agonists work by mimicking hormones that regulate appetite and insulin secretion, leading to substantial weight loss. Since obesity is a primary risk factor for obstructive sleep apnea, significant weight reduction can decrease the fat deposits around the upper airway that cause breathing interruptions during sleep. Clinical trials have shown that these drugs can reduce apnea events per hour, potentially allowing some patients to reduce or discontinue CPAP therapy.

What is the historical performance of Hedgeye’s short ideas?

Hedgeye Potomac Research employs a quantitative and fundamental process for its long and short recommendations. The firm’s performance is tracked against benchmarks, but specific win-loss records for short calls are proprietary. Like all research firms, their calls are not guaranteed successes; the market’s reaction depends on the wider adoption of the thesis by other investors and the subsequent fundamental performance of the targeted company.

Is ResMed developing a response to the threat from weight-loss drugs?

ResMed’s strategy involves emphasizing the complementary nature of its therapy. The company highlights that many patients will continue to require CPAP treatment even after weight loss and is investing in digital health platforms to improve patient engagement and adherence. ResMed is also exploring opportunities in adjacent respiratory care markets, such as COPD and out-of-hospital medical software, to diversify its revenue streams away from a sole focus on sleep apnea.

Bottom Line

Hedgeye’s short thesis posits that GLP-1 drugs represent an existential threat to ResMed’s core sleep apnea business model.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.