RMD
ResMed Inc.$259.05
Hold
Target $313.01
Report: Mar 07, 2026Healthcare • Medical - Instruments & Supplies • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$259.05+20.8%
Rec: HoldConviction: High
Entry Target
$240.78
(7% below current)
Fair Value
$313.01
(21% above current)
Stop Loss
$132.24
(49% below current)
Position Size
Half
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$293.81
52 Week Low$199.92
Avg. 3 Month Volume1.08M
Efficiency
LTM Gross Margin60.9%
LTM EBITDA Margin37.9%
LTM EBIT Margin33.3%
LTM Operating Margin33.7%
LTM ROA18.3%
LTM ROE24.8%
LTM ROIC56.3%
LTM ROCE26.2%
Capital Structure
Market Cap (MM)$32.7B
Enterprise Value (MM)$32.1B
Shares Outstanding145.84M
Total Debt (MM)$847.72M
Cash & Equivalents (MM)$1.42B
LTM Net Debt (MM)$-569.35M
LTM Net Debt/EBITDA-0.3x
Growth
TTM Rev. Growth9.6%
Last 3-Yr Rev. CAGR12.8%
Last 3-Yr EBITDA CAGR19.0%
Last 3-Yr EPS CAGR22.4%
Valuation
Street Target Price$295.88
LTM EV/Revenue6.0x
LTM EV/Gross Profit9.8x
LTM EV/EBIT17.9x
LTM EV/EBITDA15.7x
LTM P/E22.0x
LTM EV/FCF17.9x
LTM P/FCF18.3x
LTM P/TB6.5x
LTM P/B5.2x
Dividend Yield1.0%
Payout Ratio22.3%
Executive SummarySituation: Current price is $259.05 versus fair value $313.01 (20.8% expected return), and valuation confidence is stable. Debate: Bull case depends on Execution of the $600M+ Share Repurchase Program Management's commitment to increased buybacks in FY2026 validates their confidence in the stock's undervaluation and provides a steady bid for the shares. Bear case centers on Structural TAM Contraction from GLP-1 Medications If weight-loss drugs significantly reduce the prevalence of OSA, the long-term growth rate of the CPAP market could fall below nominal GDP, impairing the terminal value. Conclusion: Recommendation is Hold with Half sizing and Long-Term horizon.
Bull Case
GLP-1 medications act as a diagnostic funnel expander, bringing more patients into the healthcare system and improving long-term CPAP adherence by 6.2%. Margin expansion is accelerating, with gross margins rising 270 basis points in FY2025 toward a 62-63% target.
Bear Case
Widespread GLP-1 adoption could reduce the prevalence of OSA, shrinking the total addressable market for hardware. Philips' reentry into the U.S. device market could trigger a price war or erode ResMed's recent market share gains.
Key Catalysts
Near-Term (0-6 months)Impact: Moderate
Execution of the $600M+ Share Repurchase Program Management's commitment to increased buybacks in FY2026 validates their confidence in the s...
Mid-Term (6-18 months)Impact: High
Gross Margin Convergence to 62-63% Range Achieving the upper end of margin guidance would prove the company's pricing power and supply chain...
Long-Term (18+ months)Impact: Moderate
ResMed is highly relevant at this moment as it has just transitioned to a net-cash position and is aggressively returning capital, while the...
Primary Risks
Concern: Medium
Structural TAM Contraction from GLP-1 Medications If weight-loss drugs significantly reduce the prevalence of OSA, the long-term growth rate...
Concern: Medium
Competitive Reentry by Philips Respironics Philips' return to the U.S. market could lead to pricing pressure and a loss of the market share...
Concern: Medium
The stewardship verdict is 'Proven Status Quo.' The governance structure is stable, with a lead independent director (Ronald Taylor) providi...
Recent Activity
2025-04-24SEC Filing (8-K)
+10.14%ResMed reports Q3 FY2025 revenue up 8% to $1.3B, operating profit up 14%
2025-01-31SEC Filing (8-K)
-8.33%ResMed reports Q2 FY2025 revenue up 10% to $1.3B, operating profit up 52%
2024-10-25SEC Filing (8-K)
+7.12%ResMed reports Q1 FY2025 revenue growth of 11% and EPS of $2.11
2024-09-18Analyst Target
-5.12%Firm: Wolfe Research Analyst: Mike Polark Price Target: $180.00 Price When Posted: $250.88 Implied Downside: -28.3%
2024-04-26SEC Filing (8-K)
+18.89%ResMed reports Q3 FY2024 revenue up 7% to $1.2B, operating profit up 25%
Valuation Table
9.8/10Decision Grade
Scenario Range
$211
Bear
$290
Base
$348
Bull
$259