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Resmed (RMD)
NYSE:RMD
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Resmed
(NYSE:RMD)
Rating:83Outperform
Price Target:
$304.00
▲(13.69%Upside)
Positive Factors
Analyst Recommendation
Analyst reiterates a Buy rating for Resmed Inc with a price objective of 280.00 USD, indicating confidence in the company's future performance.
Financial Performance
The company experienced a 140 basis points gross margin expansion, reaching a level not seen since 2Q21, indicating strong financial performance.
Negative Factors
Competition
Increasing mask competition and potential new device launches from peers present challenges for RMD's future performance.
Market Overhang
The expected positive results from Apnimed's phase 3 trial create an overhang for RMD shares.
Resmed (RMD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$37.82B
Dividend Yield0.79%
Average Volume (3M)772.70K
Price to Earnings (P/E)29.0
Beta (1Y)1.08
Revenue Growth9.54%
EPS Growth37.23%
CountryUS
Employees9,980
SectorHealthcare
Sector Strength37
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)2.37
Shares Outstanding146,627,400
10 Day Avg. Volume796,655
30 Day Avg. Volume772,704
Financial Highlights & Ratios
PEG Ratio5.40
Price to Book (P/B)6.71
Price to Sales (P/S)0.00
P/FCF Ratio23.78
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue1.92
Enterprise Value/Gross Profit12.62
Enterprise Value/Ebitda5.59
Forecast
1Y Price Target
$275.00Price Target Upside2.84% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Resmed Business Overview & Revenue Model
Company DescriptionResMed (RMD) is a global leader in digital health and cloud-connected devices that focus on improving the quality of life for people with sleep apnea, chronic obstructive pulmonary disease (COPD), and other respiratory conditions. The company operates within the healthcare sector, primarily offering products and solutions such as CPAP (Continuous Positive Airway Pressure) devices, ventilators, and cloud-based software applications that monitor and manage patient data. ResMed's innovative technologies aim to enhance patient care and streamline healthcare provision across various healthcare settings.
How the Company Makes MoneyResMed generates its revenue through the sale of its medical devices, particularly those used in the treatment of sleep apnea and other respiratory disorders. Its key revenue streams include the direct sale of CPAP machines, masks, and accessories to healthcare providers and distributors. In addition to hardware sales, ResMed offers software solutions that enable healthcare professionals to track and manage patient health data, which can also contribute to recurring revenue through subscription models. The company's strategic partnerships with healthcare providers and its focus on expanding its digital health platform further enhance its revenue potential by integrating its products and services into broader healthcare systems.
Resmed Key Performance Indicators (KPIs)
Any
Sleep and Breathing Health Products Revenue by Segment
Shows revenue from different segments of sleep and breathing health products, highlighting which areas are driving growth and where the company might focus its innovation or marketing efforts.
Shows revenue from different segments of sleep and breathing health products, highlighting which areas are driving growth and where the company might focus its innovation or marketing efforts.
Data provided by:
Main Street Data
Main Street DataResmed Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q3-2025)
| % Change Since: 24.96%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, gross margin expansion, successful product launches, and increased share buybacks. Despite challenges such as sleep lab backlogs and foreign currency impacts, ResMed demonstrated resilience with strategic expansions and maintaining tariff exemptions.Q3-2025 Updates
Positive Updates
Strong Revenue Growth
Group revenue for Q3 FY2025 was $1.29 billion, an 8% headline increase and 9% in constant currency terms. Device sales increased by 7% globally, while masks and other sales increased by 12% in constant currency.
Gross Margin Expansion
Gross margin increased by 140 basis points to 59.9% in the March quarter, driven by manufacturing and logistics efficiencies and favorable product mix shifts.
Successful Launch of New Products
The first full commercial rollout of Nite Owl and the launch of AirSense 11 version of VPAP Tx contributed to new technology introductions to customers in Q3.
Recognition for Innovation
ResMed was named in the Lexus Nexus list of the top 100 global innovators, showcasing the company's market-leading efforts in pioneering innovation.
Strong Cash Flow and Net Income
Cash flow from operations was $579 million, and net income for the March quarter increased by 11%, with non-GAAP diluted earnings per share of $2.37, also increasing by 11%.
Expansion of Manufacturing Facilities
ResMed is opening a new advanced manufacturing facility in Calabasas, California, which will almost double its manufacturing footprint in the US.
Increased Share Buyback Program
ResMed plans to increase its ongoing share buyback program to purchase shares to the value of approximately $100 million per quarter starting in Q4 FY2025.
Tariff Exemptions Maintained
ResMed confirmed that it will continue to benefit from tariff exemptions on its products imported into the US, mitigating potential impacts from new tariffs.
Negative Updates
Ongoing Sleep Lab Backlogs
There is a significant backlog of patients in sleep labs, which has been a challenge in diagnosing and treating new patients efficiently.
Foreign Currency Impact
Year-over-year movements in foreign currencies negatively impacted revenue by approximately $13 million during the March quarter.
Company Guidance
During the Q3 Fiscal Year 2025 earnings call, ResMed reported strong financial performance, highlighting several key metrics. The company achieved a revenue of $1.29 billion, marking an 8% increase year-over-year, or 9% in constant currency terms. Gross margin expanded by 140 basis points to 59.9%, driven by manufacturing and logistics efficiencies and favorable product mix shifts. Sales in the US, Canada, and Latin America increased by 9%, while sales in Europe, Asia, and other regions grew by 8% on a constant currency basis. ResMed's SG&A expenses improved slightly as a percentage of revenue to 19%, while R&D expenses were 6.5% of revenue. The company generated strong free cash flow of $579 million, including a tax refund, and ended the quarter with a cash balance of $933 million. ResMed plans to increase its share buyback program to $100 million per quarter, reflecting confidence in its financial position despite ongoing global uncertainties.Resmed Financial Statement Overview
Summary
Resmed demonstrates strong financial performance with consistent revenue growth, high profitability margins, and robust cash flows. The balance sheet is stable with low leverage, although liabilities have increased. Overall, Resmed is well-positioned for growth and stability.Income Statement
Resmed demonstrates strong financial performance with consistent revenue growth, evidenced by a 7.18% revenue growth rate in the TTM compared to the previous year. The company maintains high profitability margins, including a gross profit margin of 58.52% and a net profit margin of 26.14% for the TTM. These figures reflect operational efficiency and effective cost management.92
Very Positive
Balance Sheet
Resmed's balance sheet is robust, featuring a low debt-to-equity ratio of 0.15 and a high equity ratio of 73.31% in the TTM. These indicators suggest financial stability and a strong equity base. The return on equity stands at 23.68%, indicating efficient use of shareholder funds. However, the company should monitor its total liabilities, which have increased over the years.85
Very Positive
Cash Flow
Resmed has a strong cash flow position, with a significant 21.84% growth in free cash flow in the TTM. The operating cash flow to net income ratio is 1.26, indicating healthy cash generation relative to net income. The free cash flow to net income ratio is also strong at 1.19, reinforcing the company's ability to generate cash from operations effectively.88
Very Positive
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.02B | 4.69B | 4.22B | 3.58B | 3.20B | 2.96B |
| Gross Profit | 2.94B | 2.66B | 2.36B | 2.02B | 1.84B | 1.72B |
| EBITDA | 1.71B | 1.53B | 1.36B | 1.18B | 1.10B | 990.43M |
| Net Income | 1.31B | 1.02B | 897.56M | 779.44M | 474.50M | 621.67M |
Balance Sheet | ||||||
| Total Assets | 7.57B | 6.87B | 6.75B | 5.10B | 4.73B | 4.59B |
| Cash, Cash Equivalents and Short-Term Investments | 932.71M | 238.36M | 227.89M | 273.71M | 295.28M | 463.16M |
| Total Debt | 839.77M | 873.93M | 1.58B | 917.55M | 793.72M | 1.30B |
| Total Liabilities | 2.02B | 2.01B | 2.62B | 1.74B | 1.84B | 2.09B |
| Stockholders Equity | 5.55B | 4.86B | 4.13B | 3.36B | 2.89B | 2.50B |
Cash Flow | ||||||
| Free Cash Flow | 1.56B | 1.29B | 559.30M | 195.11M | 619.89M | 696.32M |
| Operating Cash Flow | 1.65B | 1.40B | 693.30M | 351.15M | 736.72M | 802.25M |
| Investing Cash Flow | -112.84M | -269.78M | -1.16B | -229.92M | -158.46M | -179.86M |
| Financing Cash Flow | -835.65M | -1.12B | 422.87M | -128.36M | -764.63M | -317.29M |
Resmed Technical Analysis
Positive
267.40
Price Trends
252.03
Positive
237.97
Positive
238.42
Positive
Market Momentum
2.68
Negative
72.42
Negative
85.75
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMD, the sentiment is Positive. The current price of 267.4 is above the 20-day moving average (MA) of 256.85, above the 50-day MA of 252.03, and above the 200-day MA of 238.42, indicating a bullish trend. The MACD of 2.68 indicates Negative momentum. The RSI at 72.42 is Negative, neither overbought nor oversold. The STOCH value of 85.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RMD.
Resmed Risk Analysis
Resmed disclosed 36 risk factors in its most recent earnings report. Resmed reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Resmed Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $37.82B | 28.96 | 25.81% | 0.79% | 9.54% | 37.23% | |
70 Outperform | $51.26B | 34.13 | 5.97% | 2.77% | 5.84% | 15.12% | |
70 Outperform | $14.26B | 26.89 | 11.77% | ― | 1.66% | 21.95% | |
69 Neutral | $14.49B | 34.59 | 5.15% | ― | 6.88% | 21.11% | |
60 Neutral | $8.58B | 116.65 | -23.93% | ― | -0.12% | -713.82% | |
56 Neutral | $14.12B | 136.07 | -8.96% | 3.96% | -20.17% | -138.32% | |
52 Neutral | $7.46B | -0.04 | -63.82% | 2.49% | 16.43% | <0.01% |
* Healthcare Sector Average
Performance Comparison
RMD
Resmed
267.40
59.74
28.77%
BAX
Baxter International
27.51
-6.95
-20.17%
BDX
Becton Dickinson
181.28
-48.55
-21.12%
COO
Cooper Co
73.03
-17.64
-19.46%
HOLX
Hologic
65.37
-12.73
-16.30%
MASI
Masimo
158.23
48.59
44.32%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.