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Resmed Inc (RMD)
NYSE:RMD
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Resmed
(NYSE:RMD)
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Rating:78Outperform
Price Target:
$294.00
▲(11.77% Upside)
The score is driven primarily by strong profitability, low leverage, and solid cash generation, reinforced by a bullish earnings call featuring margin guidance and substantial planned share repurchases. Offsetting factors are a premium-ish valuation (P/E 26.15 with a modest yield) and only moderate technical momentum.
Positive Factors
FDA Clearance for Smart Comfort
FDA clearance for Smart Comfort, an AI-enabled device, enhances Resmed's product portfolio, potentially increasing market share and patient adherence.
Strong Revenue Growth
Consistent revenue growth across regions and products indicates robust demand and effective market strategies, supporting long-term business expansion.
Gross Margin Improvement
Improved gross margins through supply chain efficiencies enhance profitability, providing more resources for reinvestment and competitive positioning.
Negative Factors
SaaS Business Growth Challenges
Slower SaaS growth, particularly in senior living segments, may hinder Resmed's digital health expansion and affect overall revenue diversification.
Global Minimum Tax Impact
Higher tax rates reduce net income, impacting cash flow and potentially limiting funds available for strategic investments and shareholder returns.
Restructuring Charges
Restructuring costs reflect strategic realignment but may indicate operational inefficiencies, affecting short-term financial performance and morale.
Resmed (RMD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$38.32B
Dividend Yield0.92%
Average Volume (3M)854.30K
Price to Earnings (P/E)24.9
Beta (1Y)0.74
Revenue Growth9.36%
EPS Growth29.56%
CountryUS
Employees9,980
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)2.81
Shares Outstanding145,678,400
10 Day Avg. Volume1,244,260
30 Day Avg. Volume854,298
Financial Highlights & Ratios
PEG Ratio0.72
Price to Book (P/B)6.34
Price to Sales (P/S)7.36
P/FCF Ratio22.78
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue7.12
Enterprise Value/Gross Profit11.67
Enterprise Value/Ebitda18.54
Forecast
1Y Price Target
$300.64Price Target Upside14.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)11.06
Revenue Forecast (FY)$5.65B
Resmed Business Overview & Revenue Model
Company DescriptionResMed 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.
How the Company Makes MoneyResMed generates revenue through multiple streams, primarily from the sale of medical devices and software solutions for sleep and respiratory care. Key revenue sources include the sale of CPAP machines, masks, and accessories, as well as ongoing revenue from cloud-based software solutions that enable remote patient monitoring and management. The company also benefits from a subscription-based model for its digital health services, which provide ongoing support and data analytics for healthcare providers. Significant partnerships with healthcare systems and insurers further bolster ResMed's market presence, allowing for wider distribution of their products and services. Additionally, the company leverages its extensive research and development capabilities to innovate and expand its product offerings, driving growth and enhancing revenue potential.
Resmed Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down overall revenue into specific business segments, providing insight into which parts of the company are performing well and contributing most to the bottom line.
Breaks down overall revenue into specific business segments, providing insight into which parts of the company are performing well and contributing most to the bottom line.
Data provided by:
The Fly
The FlyResmed Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call emphasized multiple strong operational and financial wins: double-digit headline revenue growth, expanded margins driven by supply-chain productivity, robust device and mask growth, healthy cash generation, continued innovation (new fabric masks, first FDA-cleared AI feature), and a sizable capital return program. Headwinds were present but generally moderate: SG&A growth (partly acquisition-related), a modest tax-rate headwind from global minimum tax, a small restructuring charge, and some lumpiness in ex-U.S. device comps and certain RCS verticals. On balance the highlights materially outweigh the lowlights, reflecting continued execution, margin expansion and strong cash returns to shareholders.Q2-2026 Updates
Positive Updates
Revenue Growth
Group revenue of $1.42 billion, up 11% headline and 9% on a constant currency basis versus the prior-year quarter.
Earnings and Profitability
GAAP diluted EPS increased 16%; net income up 15%; operating profit rose 19% with operating margin improving to 36.3% of revenue (from 34% prior year).
Product and Category Performance
Global device sales increased ~11% (constant currency) and masks, accessories & other increased ~14% globally; U.S. masks/accessories grew ~16%; Europe/Asia/ROW masks/accessories grew 8% (constant currency).
Gross Margin Expansion and Supply Chain Gains
Reported gross margin was 32.3% for the quarter, up 110 basis points year-over-year and 30 basis points sequentially; management highlighted supply chain-driven productivity delivering 310 basis points of year-over-year gross margin improvement as a key driver.
Cash Generation and Balance Sheet Strength
Cash flow from operations of $340 million in the quarter; cash balance $1.4 billion; gross debt $664 million and net cash of $753 million; ~$1.5 billion available under revolver.
Capital Return to Shareholders
Returned $263 million to shareholders in the quarter via dividend and $175 million in share repurchases (704k shares); Board declared quarterly dividend of $0.60 per share; share repurchase program increased to >$600 million for FY2026.
R&D, Innovation and New Product Launches
Continued R&D investment (R&D ~6.4% of revenue this quarter, guided 6–7% FY); launched F30i Comfort and F30i Clear fabric masks with positive early feedback and ongoing rollouts.
AI and Digital Health Advances
Limited beta of Comfort Match (AI-enabled comfort setting recommender within myAir) — cited as ResMed's first FDA-cleared AI-enabled medical device aimed at improving short- and long-term adherence.
Clinical Education and Provider Engagement
Continuing Medical Education (CME) programs completed nearly 60,000 times (a 50% increase from the prior quarter) with 77% of provider survey respondents saying they intend to change clinical practice based on training.
Real-World Evidence Supporting Demand Tailwind
Claims analysis covering ~1.95 million patients: patients with both a GLP-1 and CPAP script were 10–11% more likely to start CPAP; 3% more likely to have a resupply event at 1 year and ~6.2% more likely at 3 years, indicating higher initiation and longer-term engagement.
Manufacturing and Distribution Expansion
Signed lease and started construction on a new U.S. distribution center in Indiana (on track for calendar 2027 opening) and expanded Calabasas plant to double U.S. manufacturing capacity — targeted to enable shipping to ~90% of U.S. customers in <2 business days.
Negative Updates
RCS / Residential Care Software Headwinds
Residential Care Software revenue grew 5% (constant currency) but performance was partially offset by ongoing challenges in the senior living and long-term care verticals.
SG&A Growth Outpacing Revenue (Headline)
SG&A increased 15% on a headline basis (12% constant currency) and SG&A as a percentage of revenue rose to 19.6% from 18.8% prior year; part of the increase attributed to VirtuOx acquisition and promotional/marketing investments.
Effective Tax Rate Increase
Effective tax rate increased to 21.1% from 18% (prior year) primarily due to global minimum tax legislation; FY2026 tax rate estimated at 21–23%, representing a headwind to net margins.
One-Time Restructuring Charge
Recorded a $6 million restructuring-related charge in the quarter for global workforce planning (treated as a non-GAAP adjustment).
Working Capital Pressure
Strong operating results were partially offset by increases in working capital, which reduced operating cash flow conversion in the quarter.
Ex-U.S. Device Growth Moderation and Lumpy Comparables
Devices growth in Europe/Asia/ROW was ~5% (constant currency); management noted lumpy comps (e.g., prior-year elevated Japan purchases) and variability across markets.
Dependence on External Demand Drivers and Competitive Uncertainty
Management highlighted reliance on external demand drivers (GLP-1 medicines, wearables, PCP education) to expand the funnel and noted uncertainty around potential competitor re-entries (e.g., Philips), creating execution and competitive risk despite current confidence.
Currency and One-Time Reporting Notes
Foreign exchange benefited revenue by ~ $25 million and EPS by ~$0.04 in Q2, indicating some sensitivity to FX; transcript included an inconsistent gross margin FY guidance figure that may reflect reporting nuances.
Company Guidance
ResMed provided several forward-looking metrics: for fiscal 2026 management now expects gross margin of 62%–63% (subject to currency), SG&A to run about 19%–20% of revenue and R&D about 6%–7% of revenue, and an effective tax rate of 21%–23%; the company plans more than $600 million of share repurchases in FY26 (Q2 buyback ~$175M and a declared quarterly dividend of $0.60/share), expects to maintain mid‑single‑digit growth in its RCS business through the March and June quarters while targeting a return to sustainable high‑single‑digit revenue growth and double‑digit operating profit growth in FY27, is pursuing ongoing gross‑margin productivity initiatives (310 bps YoY improvement in Q2 and a challenge to deliver double‑digit bps improvement annually through 2030), and noted a $6M restructuring charge treated as non‑GAAP.Resmed Financial Statement Overview
Summary
Strong fundamentals: high profitability (TTM gross margin 60.08%, net margin 27.35%), robust operating efficiency (EBIT margin 33.37%, EBITDA margin 37.74%), low leverage (debt-to-equity 0.14) and healthy cash generation (operating cash flow to net income 1.50; FCF growth 6.54%). Revenue growth is positive but modest (TTM 2.16%).Income Statement
Resmed demonstrates strong profitability with a TTM gross profit margin of 60.08% and a net profit margin of 27.35%. The company has shown consistent revenue growth, with a TTM growth rate of 2.16%, indicating a stable upward trajectory. EBIT and EBITDA margins are robust at 33.37% and 37.74%, respectively, reflecting efficient operational management.85
Very Positive
Balance Sheet
The balance sheet is solid with a low debt-to-equity ratio of 0.14, suggesting conservative leverage. The return on equity is impressive at 25.13%, indicating effective use of shareholder funds. The equity ratio stands at 73.67%, highlighting a strong equity base relative to total assets.78
Positive
Cash Flow
Cash flow performance is strong with a TTM free cash flow growth rate of 6.54%. The operating cash flow to net income ratio is 1.50, and the free cash flow to net income ratio is 0.94, both indicating healthy cash generation relative to earnings.82
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.15B | 4.69B | 4.22B | 3.58B | 3.20B |
| Gross Profit | 3.05B | 2.66B | 2.36B | 2.02B | 1.84B |
| EBITDA | 1.91B | 1.53B | 1.36B | 1.18B | 1.10B |
| Net Income | 1.40B | 1.02B | 897.56M | 779.44M | 474.50M |
Balance Sheet | |||||
| Total Assets | 8.17B | 6.87B | 6.75B | 5.10B | 4.73B |
| Cash, Cash Equivalents and Short-Term Investments | 1.21B | 238.36M | 227.89M | 273.71M | 295.28M |
| Total Debt | 851.81M | 873.93M | 1.58B | 917.55M | 793.72M |
| Total Liabilities | 2.21B | 2.01B | 2.62B | 1.74B | 1.84B |
| Stockholders Equity | 5.97B | 4.86B | 4.13B | 3.36B | 2.89B |
Cash Flow | |||||
| Free Cash Flow | 1.66B | 1.29B | 559.30M | 195.11M | 619.89M |
| Operating Cash Flow | 1.75B | 1.40B | 693.30M | 351.15M | 736.72M |
| Investing Cash Flow | -200.04M | -269.78M | -1.16B | -229.92M | -158.46M |
| Financing Cash Flow | -606.25M | -1.12B | 422.87M | -128.36M | -764.63M |
Resmed Technical Analysis
Positive
263.03
Price Trends
251.52
Positive
257.33
Positive
257.90
Positive
Market Momentum
1.92
Negative
60.48
Neutral
57.98
Neutral
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 263.03 is above the 20-day moving average (MA) of 255.79, above the 50-day MA of 251.52, and above the 200-day MA of 257.90, indicating a bullish trend. The MACD of 1.92 indicates Negative momentum. The RSI at 60.48 is Neutral, neither overbought nor oversold. The STOCH value of 57.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RMD.
Resmed Risk Analysis
Resmed disclosed 38 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $38.32B | 24.85 | 25.68% | 0.92% | 9.36% | 29.56% | |
68 Neutral | $59.22B | 35.50 | 6.54% | 2.13% | 8.23% | -2.04% | |
68 Neutral | $17.05B | 34.21 | 16.94% | 0.32% | 4.90% | -0.26% | |
63 Neutral | $16.65B | 30.95 | 10.86% | ― | 1.74% | -25.29% | |
58 Neutral | $7.34B | -12.88 | -17.93% | ― | -16.03% | -813.48% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
47 Neutral | $10.81B | -40.33 | -4.70% | 2.75% | -21.20% | -325.40% |
* Healthcare Sector Average
RMD
Resmed
263.03
27.94
11.89%
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21.03
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MASI
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136.62
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237.05
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Resmed Corporate Events
DividendsFinancial Disclosures
ResMed Announces Dividend and Strong Quarterly Earnings Growth
Positive
Jan 29, 2026
On January 29, 2026, Resmed’s board declared a quarterly cash dividend of US$0.60 per share, payable March 19, 2026, to shareholders of record on February 12, 2026, with payments made in U.S. dollars for NYSE-listed common stock and in Australian dollars for CHESS Depositary Instrument holders on the ASX, reflecting the 10:1 CDI-to-share ratio and a temporary waiver to defer stock-to-CDI conversions around the ex-dividend date. On the same day, the company reported strong results for the quarter ended December 31, 2025, with revenue up 11% to US$1.42 billion (9% in constant currency), gross margin expanding to 61.8%, income from operations rising 18%, and diluted EPS increasing 15% to US$2.68, underpinned by robust demand for its sleep and respiratory devices, growing contribution from its digital health platform, and solid cash generation, reinforcing its positioning for continued investment-led yet profitable growth in the second half of fiscal 2026.
The most recent analyst rating on (RMD) stock is a Buy with a $300.00 price target. To see the full list of analyst forecasts on Resmed stock, see the RMD Stock Forecast page.
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
ResMed Streamlines Governance at Annual Meeting
Neutral
Nov 20, 2025
On November 19, 2025, ResMed Inc. held its annual meeting where significant decisions were made regarding the company’s governance and operational plans. Richard Sulpizio’s term on the board expired, leading to a reduction in board members from twelve to eleven. Additionally, stockholders approved several key proposals, including the election of eleven directors, the ratification of KPMG LLP as the independent auditor for the fiscal year ending June 30, 2026, and amendments to the 2009 Incentive Award Plan and the 2018 Employee Stock Purchase Plan. These decisions reflect ResMed’s ongoing efforts to streamline its governance and enhance its incentive structures, potentially impacting its strategic direction and stakeholder engagement.
The most recent analyst rating on (RMD) stock is a Buy with a $300.00 price target. To see the full list of analyst forecasts on Resmed stock, see the RMD Stock Forecast page.
DividendsFinancial Disclosures
Resmed Announces Quarterly Dividend Amid Strong Q1 Results
Positive
Oct 30, 2025
On October 30, 2025, Resmed announced a quarterly cash dividend of $0.60 per share, payable on December 18, 2025, with a record date of November 13, 2025. The company also reported strong financial results for the first quarter of fiscal year 2026, with a 9% increase in revenue to $1.3 billion and a 15% rise in income from operations. Resmed’s performance reflects its strategic focus on transforming home healthcare, with significant growth in revenue and gross margin, driven by increased demand for its sleep devices and accessories.
The most recent analyst rating on (RMD) stock is a Buy with a $304.00 price target. To see the full list of analyst forecasts on Resmed stock, see the RMD Stock Forecast page.
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.