Resmed
RMD
$231.52
+1.35%
ResMed Inc. is a global leader in respiratory care devices, primarily developing and supplying flow generators, masks, and accessories for the treatment of sleep apnea, with a growing focus on digital health solutions. The company operates in the medical devices industry and is distinguished by its dominant market position in sleep and respiratory care, leveraging clinical data to differentiate its offerings. Currently, the investor narrative centers on ResMed's strategic acquisitions, such as the $340 million purchase of Noctrix Health for Restless Legs Syndrome therapy, and its ability to sustain growth amid increasing sleep apnea diagnoses and an aging population. The stock has faced volatility due to market-wide tech selloffs and company-specific concerns, but recent momentum suggests a recovery as investors weigh its long-term structural growth prospects.…
RMD
Resmed
$231.52
Related headlines
Investment Opinion: Should I buy RMD Today?
Based on the analysis, ResMed is rated a Buy. The company's strong revenue growth of 10.81% YoY, high net margin of 26.94%, and reasonable forward PE of 16.95x support a positive outlook. The analyst consensus is Buy with an average target price of $247.20, implying a 10.1% upside from the current price of $224.46. The high target of $325.00 suggests significant upside potential if the company executes well.
Sign up to view all
RMD 12-Month Price Forecast
The AI assessment is bullish on ResMed, driven by its strong financial performance, reasonable valuation, and positive analyst sentiment. The company's ability to sustain double-digit revenue growth and maintain high margins is a key strength. However, the medium confidence reflects the recent price decline and analyst downgrades, which introduce uncertainty. If ResMed can deliver consistent earnings beats and successfully integrate Noctrix Health, the stance would be upgraded to high confidence. Conversely, a slowdown in growth or margin compression would lead to a downgrade to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Resmed's 12-month outlook, with a consensus price target around $245.50 and implied upside of +6.0% versus the current price.
Average Target
$245.50
0 analysts
Implied Upside
+6.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$175 - $320
Analyst target range
The target price range spans from $175.00 to $325.00, with a spread of $150.00, indicating high uncertainty about ResMed's future performance. The high target likely assumes accelerating growth from new product launches and acquisitions, such as Noctrix Health, and potential margin expansion. The low target may price in competitive pressures, regulatory challenges, or a slowdown in sleep apnea device demand. Recent institutional ratings show a mix of actions, including a downgrade from Citigroup to Neutral in July 2026 and a downgrade from Morgan Stanley to Equal Weight in June 2026, suggesting some analysts are becoming more cautious. However, the overall consensus remains positive, with firms like Mizuho and RBC Capital maintaining Outperform ratings.
Bulls vs Bears: RMD Investment Factors
ResMed presents a mixed picture: strong fundamentals with accelerating revenue growth, high margins, and a reasonable valuation are offset by a significant price decline, analyst downgrades, and concentration risk. The bull case is supported by solid execution and strategic expansion, while the bear case is driven by market sentiment and valuation concerns. Currently, the bull side has slightly stronger evidence due to the company's robust financial performance and reasonable forward PE, but the key tension lies in whether the stock can regain investor confidence and sustain growth in the face of competitive and regulatory headwinds. The resolution of this tension—whether ResMed can maintain double-digit revenue growth and expand margins—will determine the stock's trajectory.
Bullish
- Accelerating Revenue Growth: Q3 FY2026 revenue grew 10.81% YoY to $1,431.4M, with sequential increases from $1,335.6M in Q1 to $1,422.8M in Q2, indicating a clear upward trajectory. This acceleration is driven by rising sleep apnea diagnoses and an aging population, providing a solid foundation for continued expansion.
- High Profitability and Margins: ResMed boasts a net margin of 26.94% and an operating margin of 33.48%, reflecting strong operational efficiency. The gross margin of 61.16% underscores pricing power and cost management, supporting robust earnings generation.
- Reasonable Valuation with Forward Discount: The trailing PE of 18.67x and forward PE of 16.95x indicate expected earnings growth, while the PEG ratio of 2.00 suggests the stock is reasonably priced relative to its growth rate. This valuation is attractive for a medical device leader with consistent growth.
- Strategic Acquisitions for Growth: The $340 million acquisition of Noctrix Health expands ResMed's portfolio into Restless Legs Syndrome therapy, a first-in-class non-invasive treatment. This diversification into adjacent sleep and neurological disorders could open new revenue streams and enhance long-term growth prospects.
Bearish
- Significant Price Decline and Underperformance: The stock has fallen 21.16% over the past year, underperforming the S&P 500 by 41.53% (relative strength -41.53%). The 52-week high of $293.81 is far above the current price of $224.46, indicating persistent selling pressure and a potential loss of investor confidence.
- Analyst Downgrades and Mixed Sentiment: Recent downgrades from Citigroup (to Neutral) and Morgan Stanley (to Equal Weight) in mid-2026 suggest growing caution among analysts. While the consensus remains Buy, the mean rating of 2.39 (on a scale where 1 is Strong Buy) indicates a less enthusiastic outlook.
- High Valuation Relative to Growth: The PEG ratio of 2.00 implies that the stock is trading at a premium to its expected earnings growth rate. With a forward PE of 16.95x, any slowdown in growth could lead to multiple compression, making the stock vulnerable to downside.
- Dependence on Sleep Apnea Market: ResMed's revenue is heavily concentrated in sleep and respiratory care, which accounted for $1,255.9M of Q3 revenue (87.7%). This concentration exposes the company to regulatory changes, competitive pressures, or shifts in treatment paradigms that could impact demand.
RMD Technical Analysis
ResMed's price trend over the past year has been predominantly downward, with a 1-year price change of -21.16%, reflecting a significant decline from its 52-week high of $293.81. The current price of $224.46 sits at approximately 76.4% of the 52-week range (calculated as (224.46 - 180.27) / (293.81 - 180.27)), indicating that the stock is trading closer to its low than its high, which could suggest a value opportunity or a falling knife depending on fundamental support. The stock's beta of 0.748 indicates it is less volatile than the broader market, which may appeal to risk-averse investors, but the sustained downtrend highlights persistent selling pressure.
Beta
0.75
0.75x market volatility
Max Drawdown
-37.8%
Largest decline past year
52-Week Range
$180-$294
Price range past year
Annual Return
-19.7%
Cumulative gain past year
| Period | RMD Return | S&P 500 |
|---|---|---|
| 1m | +20.0% | +2.5% |
| 3m | +11.3% | +2.7% |
| 6m | -10.7% | +11.1% |
| 1y | -19.7% | +20.5% |
| ytd | -5.4% | +12.3% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
RMD Fundamental Analysis
ResMed's revenue trajectory shows robust growth, with the most recent quarter (Q3 FY2026) reporting revenue of $1,431.4 million, a 10.81% year-over-year increase. This growth is accelerating, as evidenced by sequential quarterly revenues of $1,422.8 million in Q2 and $1,335.6 million in Q1, indicating a steady upward trend. The company's revenue is diversified, with Sleep and Respiratory contributing $1,255.9 million and Residential Care Software adding $166.9 million, though the latter is a smaller but growing segment. This growth is driven by increasing sleep apnea diagnoses and the aging population, positioning ResMed well for continued expansion.
Quarterly Revenue
$1.4B
2026-03
Revenue YoY Growth
+10.8%
YoY Comparison
Gross Margin
62.3%
Latest Quarter
Free Cash Flow
$1.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is RMD Overvalued?
Given ResMed's positive net income, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 18.67x, while the forward PE is 16.95x, indicating that the market expects earnings growth, as the forward multiple is lower. This gap suggests that analysts anticipate improved profitability, which is supported by the company's strong net margin of 26.94% and operating margin of 33.48%. The PE ratio is reasonable for a medical device company with consistent growth, and the forward discount implies a positive outlook.
PE
18.7x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 21x~50x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.8x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are moderate. ResMed's debt-to-equity ratio of 0.125 is low, indicating a conservative balance sheet, but the company's reliance on continued revenue growth to justify its valuation is a concern. The forward PE of 16.95x implies expectations of earnings growth, and any shortfall could lead to multiple compression. Additionally, the net margin of 26.94% is high, but it could be pressured by rising R&D and SG&A expenses, which have been increasing sequentially. The company's free cash flow of $1,748M is strong, but it may be used for acquisitions, which carry integration risks. Revenue concentration in sleep apnea devices (87.7% of Q3 revenue) exposes the company to product-specific risks, such as recalls or technological disruption.