RMD Stock Risk & Deep Value Analysis
Resmed Inc
Healthcare • Medical Instruments & Supplies
DVR Score
out of 10
What You Need to Know About RMD Stock
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We ran RMD through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
RMD Risk Analysis & Red Flags
What Could Go Wrong
Slower than anticipated market expansion or intensified competition from established rivals like Philips, should their recall issues fully resolve, could constrain ResMed's revenue growth below its current 10.8% YoY. This would limit upside beyond current analyst valuations, potentially keeping the stock in the $220-$250 range for the next 12-18 months if growth decelerates to single digits.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Low
Competitive
Medium
Execution
Low
Regulatory
Medium
Red Flags
- ⚠
Insider selling of $4.38 million in shares over the last 90 days, though not CEO/CFO specific, can suggest a lack of strong conviction at current price levels.
- ⚠
While impressive, the 10.8% YoY revenue growth for a $28.44B market cap company is insufficient to generate a 10x return in 3-5 years without significant acceleration, which is not currently evident.
Upcoming Risk Events
- 📅
Major competitor (e.g., Philips) fully resolving recall issues and aggressively re-entering the market, intensifying pricing pressure in Q4 FY2026 onwards.
- 📅
Adverse regulatory changes impacting reimbursement for sleep apnea devices or increasing compliance costs, potentially impacting margins by mid-2027.
When to Reconsider
- 🚪
Exit if quarterly revenue growth drops below 5% YoY for two consecutive quarters, indicating a significant slowdown in core business.
- 🚪
Sell if gross margin falls below 60% for two consecutive quarters, signaling unsustainable pricing pressure or cost increases.
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What Does Resmed Inc (RMD) Do?
Market Cap
$28.44B
Sector
Healthcare
Industry
Medical Instruments & Supplies
ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications to diagnose, treat, and manage respiratory disorders in the United States and internationally. The company operates in two segments, Sleep and Breathing Health, and Residential Care Software. It offers sleep recorders for the diagnosis and titration of sleep apnea in sleep clinics, hospitals, and at home, including ApneaLink Air, a portable diagnostic device that measures oximetry, respiratory effort, pulse, nasal flow, and snoring; NightOwl, a portable, cloud-connected, and disposable diagnostic device that measures AHI based on derived peripheral arterial tone, actigraphy, and oximetry; and EasyCare Tx, a sleep lab solution. 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; and connectivity module which provides a cellular connection between compatible ventilation devices and AirView system. In addition, the company offers Brightree solutions which are solutions and services for organizations in home medical equipment and pharmacy, orthotic and prosthetic, and home infusion; HEALTHCAREfirst solutions that offers electronic health record, software, billing and coding services, and advanced analytics that enables home health and hospice agencies to optimize clinical, financial and administrative processes; MatrixCare EHR software as a service solutions used by skilled nursing and senior living providers, life plan communities, and home health and hospice sectors; and MEDIFOX DAN software solutions that is used by residential care providers, such as home health and nursing home providers. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.
Visit Resmed Inc WebsiteInvestment Thesis
If ResMed leverages its strong market leadership in sleep and respiratory care to consistently deliver 10%+ YoY revenue growth, driven by continued adoption of its integrated digital health solutions and potential strategic acquisitions, then its robust profitability (62.8% gross margin) and FCF generation should support sustained EPS growth, justifying its current valuation and offering stable, incremental returns, but not 10x potential.
Is RMD Stock Undervalued?
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RMD Price Targets & Strategy
12-Month Target
$286.18
Bull Case
$340.00
Bear Case
$227.00
Valuation Basis
Based on 23x forward P/E applied to estimated $12.44 FY2027 EPS.
Entry Strategy
Consider dollar-cost averaging in the $185-$195 range, which is below the current price and could represent a more conservative entry point.
Exit Strategy
Take profit at $280-$300 (near analyst consensus average) for short-term gains, with a stop loss if share price falls below $175 (historical support).
Portfolio Allocation
3-5% for moderate risk tolerance, given its stability and dividend.
Price Targets & Strategy
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Is RMD Financially Healthy?
Valuation
P/E Ratio
18.71
Forward P/E
30.10
EV/EBITDA
17.60
PEG Ratio
0.79
Price/Book
7.10
Price/Sales
8.20
Profitability
Gross Margin
61.56%
Operating Margin
34.18%
Net Margin
27.44%
Return on Equity
24.41%
Revenue Growth
10.28%
EPS
$10.37
Balance Sheet
Current Ratio
3.44
Quick Ratio
2.16
Debt/Equity
0.11
Cash Flow
Free Cash Flow
$1.75B
Other
Beta (Volatility)
0.76
Dividend Yield
1.22%
Does RMD Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable to Expanding
Moat Sources
3 Identified
ResMed's moat is durable due to its established brand, deep R&D in medical-grade connected devices, and the high switching costs for patients and clinicians embedded in its ecosystem, making it challenging for new players to gain significant market share.
Moat Erosion Risks
- •Rapid advancements in non-device-based therapies (e.g., pharmaceuticals for sleep apnea) could reduce demand for its core products.
- •Regulatory shifts that mandate open data platforms or reduce intellectual property protections for medical devices.
RMD Competitive Moat Analysis
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RMD Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral, as RMD is a mature healthcare company not typically subject to significant retail investor speculation or social media trends.
Institutional Sentiment
Positive, indicated by a 'Moderate Buy' consensus from analysts, with 9 Buy and 5 Hold ratings. Recent target raises (e.g., RBC to $321) offset by cuts (e.g., Wells Fargo to $227).
Insider Activity (Form 4)
Insiders collectively sold 18,973 shares worth $4,386,031 in the last 90 days, representing a small portion of total shares owned (0.65%).
Options Flow
Normal options activity; no unusual put/call ratio or large block trades indicating significant institutional positioning was identified in the provided research.
Earnings Intelligence
Next Earnings
Estimated early-August 2026 (for Q4 FY2026, ending June 30, 2026)
Surprise Probability
Medium
Historical Earnings Pattern
ResMed has a history of consistently beating EPS and revenue estimates, typically leading to positive but measured stock price reactions, reflecting its stable, predictable growth profile.
Key Metrics to Watch
Competitive Position
Top Competitor
Philips (PHG)
Market Share Trend
Stable to Gaining, particularly in the wake of competitor product recalls, though specific recent shifts are not detailed in the provided research.
Valuation vs Peers
Trading at a P/E of 18.90, which is generally in line with or at a slight premium to stable-growth large-cap medical device peers, reflecting its market leadership and consistent profitability.
Competitive Advantages
- •Strong brand recognition and reputation in sleep and respiratory care.
- •Extensive R&D and intellectual property in connected medical devices and digital health platforms.
- •Established global distribution networks and clinical relationships.
Market Intelligence
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What Could Drive RMD Stock Higher?
Near-Term (0-6 months)
- •Q4 FY2026 Earnings Report (estimated late July/early August 2026): Continued double-digit revenue growth and gross margin expansion would reinforce market confidence.
- •Quarterly Dividend Payment ($0.60 per share, June 18, 2026): Demonstrates shareholder return and financial health.
Medium-Term (6-18 months)
- •Continued market share gains from competitors in the sleep apnea device segment (e.g., due to Philips' ongoing recall challenges), potentially adding 2-3% to YoY growth over 12-18 months.
- •Expanded adoption of new cloud-connected digital health solutions, driving higher recurring revenue streams and improved patient adherence rates.
Long-Term (18+ months)
- •Development and commercialization of new diagnostic tools or therapies for previously underserved chronic respiratory conditions, adding a new significant revenue stream by FY2030.
- •Strategic acquisitions in adjacent health technology sectors that broaden ResMed's digital health ecosystem and extend its TAM over the next 3-5 years.
Catalysts & Growth Drivers
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What's the Bull Case for RMD?
- ✓
Monitor quarterly YoY revenue growth, ensuring it remains above 8% to confirm market leadership and sustained demand.
- ✓
Track gross margin trends; a sustained decline below 60% would signal intensifying competitive pressure or rising input costs.
Bull Case Analysis
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Competing with RMD
See how Resmed Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Resmed Inc RMD | $28.4B | 0.1 | 18.7 | $4.7B | 27.4% | 10.3% | |
AbbVie Inc ABBV | $381.1B | 0.1 | 104.8 | $15.0B | 5.8% | 9.5% | Compare → |
Johnson & Johnson JNJ | $557.1B | 1.0 | 26.5 | — | 21.8% | 7.9% | Compare → |
Eli Lilly and Co LLY | $965.0B | 0.5 | 52.6 | — | — | — | Compare → |
Pfizer Inc PFE | $146.4B | 4.0 | 19.5 | $62.6B | 11.8% | 1.4% | Compare → |
UnitedHealth Group Inc UNH | $365.5B | 0.3 | 30.3 | $447.6B | 2.7% | 9.7% | Compare → |
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How Resmed Inc Makes Money
ResMed Inc. designs, manufactures, and distributes medical devices and digital health solutions primarily focused on treating and managing sleep-disordered breathing (such as sleep apnea) and chronic respiratory conditions like COPD. The company generates revenue by selling its range of devices, including CPAP machines, masks, and ventilators, along with providing cloud-connected software platforms that enable patient monitoring and data management for healthcare providers, thus facilitating a connected care ecosystem.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Resmed Inc (RMD)?
As of June 8, 2026, Resmed Inc has a DVR Score of 0.1 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Resmed Inc?
Resmed Inc's market capitalization is approximately $28.4B. The company operates in the Healthcare sector within the Medical Instruments & Supplies industry.
What ticker symbol does Resmed Inc use?
RMD is the ticker symbol for Resmed Inc. The company trades on the NYQ.
What is the risk level for RMD stock?
Our analysis rates Resmed Inc's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of RMD?
Resmed Inc currently has a price-to-earnings (P/E) ratio of 18.7. This is in line with broader market averages.
Does Resmed Inc pay a dividend?
Yes, Resmed Inc pays a dividend with a current yield of approximately 1.22%.
Is Resmed Inc's revenue growing?
Resmed Inc has reported revenue growth of 10.3%. The company is showing strong top-line momentum.
Is RMD stock profitable?
Resmed Inc has a profit margin of 27.4%. This indicates strong profitability.
How often is the RMD DVR analysis updated?
Our AI-powered analysis of Resmed Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on June 8, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for RMD (Resmed Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.