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1. Company Snapshot

1.a. Company Description

ResMed Inc.develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets.The company operates in two segments, Sleep and Respiratory Care, and Software as a Service.


It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes.The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME)to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal.It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; and HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies.


The company markets its products primarily to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force in approximately 140 countries.ResMed Inc.was founded in 1989 and is headquartered in San Diego, California.

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1.b. Last Insights on RMD

ResMed's recent performance was driven by strong Q3 fiscal 2025 results, reflecting momentum and execution across its business. The company's stellar earnings and revenue beat, with adjusted EPS of $2.37, beating consensus estimates. Additionally, ResMed's dominance in the sleep solutions market, with strong margins and recurring revenues, offers a compelling mix of value and growth. The company's continued investment in R&D, enhancing its product portfolio and expanding into new markets, justifies its premium share price. Furthermore, ResMed's low-leverage stock status, with a 1.38% average dividend yield and 18.78% 5-year dividend growth rate, makes it an attractive investment opportunity.

1.c. Company Highlights

2. ResMed's Strong Q1 FY2026 Earnings: Driven by Device and Mask Sales Growth

ResMed reported a robust first quarter fiscal year 2026, with group revenue increasing 9% to $1.34 billion, driven by positive contributions across the product and resupply portfolio. Gross margin expanded 280 basis points year-over-year to 62%, primarily due to component cost improvements and manufacturing and logistics efficiencies. Non-GAAP diluted earnings per share increased 16% to $2.55, beating analyst estimates of $2.51.

Publication Date: Nov -01

📋 Highlights
  • 9% Revenue Growth: ResMed reported Q1 FY2026 revenue of $1.34 billion, up 9% YoY, driven by 7% device growth and 10% masks/others sales.
  • 280 bps Gross Margin Expansion: Gross margin reached 62% (up 280 bps YoY), attributed to cost efficiencies and logistics improvements.
  • $238M Shareholder Returns: The company returned $238 million to shareholders in Q1, with plans for $150 million quarterly buybacks in FY2026.
  • 19% Operating Profit Growth: Operating profit surged 19% YoY, with operating margin expanding to 36.1% from 33.2% in the prior year.
  • $16M Restructuring Charge: A non-GAAP charge was recorded due to workforce planning, aligning capabilities with 2030 strategic goals.

Revenue Growth Drivers

Revenue growth was driven by high single-digit growth in devices and double-digit growth in masks and other categories. Europe, Asia, and Rest of World devices achieved 7% growth on a constant currency basis. The company's focus on expanding its mask portfolio through new product innovation and driving mask resupply through education, awareness, and execution contributed to the growth. ResMed launched new products, including two world-first full-face fabric masks, and rolled out an AI-enabled comfort setting technology called Comfort Match.

Operating Expenses and Profitability

Operating expenses increased 8% on a headline basis and 7% on a constant currency basis, driven by additional expenses associated with the VirtuOx acquisition and growth in employee costs. Despite this, operating profit increased 19%, underpinned by revenue growth and gross margin expansion, with the operating margin improving to 36.1% of revenue compared to 33.2% in the prior year period.

Valuation and Outlook

With a P/E Ratio of 25.15 and an expected revenue growth rate of 8.9% next year, ResMed's valuation appears reasonable. The company's strong free cash flow and robust balance sheet provide significant flexibility to invest in the business and return capital to shareholders. ResMed's focus on innovation, marketing, and technology is expected to drive growth in its SaaS business, with mid-to-high single-digit growth expected near-term and high single-digit growth next year.

Conclusion on Financial Health

ResMed's financial health is strong, with a Return on Equity (ROE) of 25.13% and a Return on Invested Capital (ROIC) of 19.62%. The company's Net Debt / EBITDA ratio is -0.27, indicating a healthy debt position. With a Dividend Yield of 0.89% and a Free Cash Flow Yield of 4.89%, ResMed offers an attractive investment opportunity.

3. NewsRoom

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Should You Continue to Hold RMD Stock in Your Portfolio?

Dec -03

Source: zacks.com

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ResMed Inc. $RMD Shares Sold by Elevation Point Wealth Partners LLC

Dec -03

Source: defenseworld.net

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Aviso Financial Inc. Buys 9,147 Shares of ResMed Inc. $RMD

Nov -25

Source: defenseworld.net

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IDEXX Laboratories Vs ResMed: Which Stock Could Rally?

Nov -24

Source: forbes.com

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ResMed: Safe Bet For A Recession Environment

Nov -17

Source: seekingalpha.com

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ResMed Inc. $RMD Shares Sold by Allianz SE

Nov -15

Source: defenseworld.net

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Could GLP-1 Drugs Make ResMed's CPAP Machines Obsolete?

Nov -12

Source: fool.com

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Oppenheimer Asset Management Inc. Cuts Stock Position in ResMed Inc. $RMD

Nov -02

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.26%)

6. Segments

Sleep and Breathing Health

Expected Growth: 11.4%

ResMed's growth is driven by its digital health solutions, increasing adoption of remote patient monitoring, and rising demand for sleep apnea and chronic obstructive pulmonary disease treatments

Residential Care Software

Expected Growth: 10.3%

None

7. Detailed Products

AirSense 10 CPAP Machine

A continuous positive airway pressure (CPAP) machine designed to treat sleep apnea, providing a comfortable and quiet sleep experience.

AirMini Travel CPAP

A portable and compact CPAP machine designed for travel, providing the same therapy as a traditional CPAP machine in a smaller package.

Bilevel ST-A

A bilevel positive airway pressure (BiPAP) machine designed to treat respiratory insufficiency, providing two different pressure levels for inhalation and exhalation.

N20 Nasal Mask

A nasal mask designed for CPAP therapy, providing a comfortable and secure fit for patients with sleep apnea.

ResMed S+ Sleep Tracker

A non-contact sleep tracking device that monitors sleep patterns, providing insights to improve sleep quality.

ResMed myAir App

A mobile app that tracks sleep data, provides personalized coaching, and offers therapy management for CPAP users.

8. ResMed Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ResMed Inc. faces moderate threat from substitutes, as patients may opt for alternative treatments or devices for sleep disorders and respiratory care. However, the company's strong brand reputation and patented technology mitigate this threat to some extent.

Bargaining Power Of Customers

ResMed Inc. has a diverse customer base, including healthcare providers, patients, and distributors. While customers have some bargaining power, the company's strong relationships and customized solutions reduce the impact of customer bargaining power.

Bargaining Power Of Suppliers

ResMed Inc. has a diversified supplier base, and the company's scale and global presence reduce its dependence on individual suppliers. This limits the bargaining power of suppliers.

Threat Of New Entrants

The medical device industry has high barriers to entry, including regulatory hurdles and significant R&D investments. This limits the threat of new entrants, and ResMed Inc.'s established brand and technology leadership position further reduce this threat.

Intensity Of Rivalry

The sleep disorder and respiratory care markets are highly competitive, with several established players. ResMed Inc. faces intense competition from companies like Philips Respironics and Fisher & Paykel Healthcare, which drives innovation and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 27.67%
Debt Cost 3.95%
Equity Weight 72.33%
Equity Cost 7.15%
WACC 6.26%
Leverage 38.26%

11. Quality Control: ResMed Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ResMed

A-Score: 5.9/10

Value: 2.0

Growth: 8.1

Quality: 8.7

Yield: 1.0

Momentum: 7.0

Volatility: 8.7

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Boston Scientific

A-Score: 5.1/10

Value: 0.9

Growth: 6.6

Quality: 6.7

Yield: 0.0

Momentum: 6.5

Volatility: 9.7

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Becton Dickinson

A-Score: 4.1/10

Value: 3.2

Growth: 3.8

Quality: 5.1

Yield: 3.0

Momentum: 1.0

Volatility: 8.7

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Intuitive Surgical

A-Score: 4.1/10

Value: 0.0

Growth: 6.8

Quality: 7.8

Yield: 0.0

Momentum: 3.5

Volatility: 6.3

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West Pharma

A-Score: 3.8/10

Value: 0.9

Growth: 6.2

Quality: 7.4

Yield: 0.0

Momentum: 4.0

Volatility: 4.0

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OraSure Technologies

A-Score: 3.4/10

Value: 7.1

Growth: 4.2

Quality: 5.0

Yield: 0.0

Momentum: 1.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

256.55$

Current Price

256.55$

Potential

-0.00%

Expected Cash-Flows