Company Reports

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack, and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

ResMed grew fiscal 2026 EPS 17% to USD 11.2. Management guides to 12% to 14% core EPS growth in fiscal 2027. Shares fell 8%.

We transfer coverage of ResMed, one of the largest respiratory care device companies globally. It primarily sells flow generators and masks for the treatment of sleep apnea. Demand is underpinned by increasing awareness and diagnosis of sleep apnea, and aging populations.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack, and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

ResMed's fiscal third-quarter underlying EBIT grew 18%. Constant-currency mask sales revenue grew 12%, and gross margin expanded 290 basis points to 63% on component cost improvements and manufacturing and logistics efficiencies. Shares fell 4%.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack, and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

Resmed's second-quarter fiscal 2026 underlying EBIT grew by 19%. The result was driven by 14% mask sales growth and gross margin expanding 310 basis points to 62% on component cost improvements and manufacturing and logistics efficiencies. The market reacted favorably with shares up 4%.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

ResMed's first-quarter fiscal 2026 underlying EBIT grew by 19%, broadly in line with market expectations. The result was driven by 10% US sales growth and a 280-basis-point expansion in gross margin to 62% on component cost improvements and manufacturing and logistics efficiencies.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

ResMed's fourth-quarter fiscal 2025 underlying EBIT grew 7% on the third, driven by increased product demand and gross margin expanding 150 basis points to 61% on component cost improvements and a currency tailwind. ResMed guided to gross margins expanding to roughly 62% in fiscal 2026.

ResMed's third-quarter fiscal 2025 underlying EBIT grew 2% on the second quarter of fiscal 2025, on higher revenue despite typical seasonal softness and currency headwinds. Gross margin was a highlight, expanding 70 basis points sequentially to 60% on manufacturing and distribution efficiencies.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

President Donald Trump unleashed a barrage of reciprocal tariffs on US trading partners that were more expansive and aggressive than the market was expecting. Pharmaceuticals are exempt for now but most medical devices are affected. Australian healthcare stocks broadly reacted negatively.

Our prior research for the Australian CDIs had incorrect financial ratios, given a recent change in our process for extracting financial ratios from our equity databases. This has now been corrected. In future, our dividend and earnings forecasts will be shown on a USD per share basis. Each ResMed share is equivalent to 10 CDIs. The shares are traded in the US, whereas the CDIs are traded on the Australian stock exchange.

Shares in narrow-moat ResMed are modestly undervalued following a solid second-quarter fiscal 2025. Underlying EBIT of USD 436 million was 7% higher than first-quarter fiscal 2025, with sales up 5% on increased product demand and underlying EBIT margin up a strong 81 basis points to 34%. Selling, general, and administrative expenses were a highlight, decreasing by 67 basis points sequentially to 19% of revenue. Overall, second-quarter revenue and earnings broadly met our forecasts, and we leave our long-term estimates largely unchanged. Our forecast five-year revenue and EBIT compound annual growth rates are 8% and 10%, respectively, broadly consistent with ResMed’s five-year guidance for high-single-digit revenue growth and higher earnings growth. We raise our fair value estimate 2% to USD 275, or AUD 44 per CDI at current exchange rates, largely due to the time value of money. The US-listed shares trade at a 6% discount to our fair value estimate, versus 9% for the Australian CDIs. We are likely more optimistic than the market on ResMed’s ability to take advantage of growing awareness of sleep apnea.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.

Shares in narrow-moat ResMed remain undervalued following a solid first-quarter fiscal 2025. Underlying EBIT of USD 406 million was 1% higher than fourth-quarter fiscal 2024, with sales slightly up on increased product demand and underlying EBIT margin up a strong 45 basis points to 33%. SG&A expense was a highlight, decreasing by 28 basis points sequentially to 20% of revenue. First-quarter revenue and earnings met our forecasts, and we leave our long-term estimates largely unchanged. Our forecast five-year revenue and EBIT compound annual growth rates are 8% and 10%, respectively, broadly consistent with ResMed’s five-year guidance for high-single-digit revenue growth and higher earnings growth. We raise our fair value estimate by 2% to USD 270, or AUD 40.50 per CDI at current exchange rates, largely due to the time value of money.

ResMed is taking a “smart devices” and Big Data approach to further entrench itself as one of the two leading players in the global obstructive sleep apnea, or OSA, market. With cloud-connected devices, physicians can monitor patient compliance and encourage continued use. Higher adherence supports both reimbursement rates from payers and the resupply of masks and accessories. ResMed also plays a key role in producing clinical data that demonstrates treatment can minimize related risks such as hypertension, stroke, heart attack and Alzheimer’s disease. Through its own testing devices and education, ResMed seeks more widespread diagnosis and treatment of OSA.