Is ResMed’s (RMD) Hardware-Led Margin Strength Quietly Redefining Its Software-Driven Narrative?

• In the past few days, ResMed reported largely positive fiscal second-quarter 2026 results, with strength in its Masks & Accessories and Devices segments offsetting softer performance in its Software as a Service business.
• Analysts highlighted improving margins and operating leverage across ResMed’s core hardware operations, underlining how the company’s earnings profile is being shaped by product mix and cost efficiencies rather than software growth alone.
• Now we’ll explore how stronger hardware-driven results and improving margins may influence ResMed’s existing investment narrative and long-term assumptions.

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ResMed Investment Narrative Recap

To own ResMed, you need to believe in ongoing demand for sleep and respiratory care, and the company’s ability to monetise that demand through both devices and software. The latest quarter’s hardware driven strength and margin improvement appear to support the near term earnings story, while the biggest risk still sits around pricing and reimbursement pressure rather than any immediate shift from the recent results.

The Q2 2026 earnings release, with higher sales and net income alongside improved profit margins, is the clearest recent marker for this thesis. It shows how product mix and cost efficiencies in Devices and Masks & Accessories can offset a softer Software as a Service contribution, which matters if investors are watching for operating leverage to underpin ResMed’s current valuation.

Yet while margins are improving, investors should be aware that tighter reimbursement or competitive bidding programs could...

Read the full narrative on ResMed (it's free!)

ResMed's narrative projects $6.4 billion revenue and $1.9 billion earnings by 2028. This requires 7.8% yearly revenue growth and about a $0.5 billion earnings increase from $1.4 billion today.

Uncover how ResMed's forecasts yield a $297.47 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Seven fair value estimates from the Simply Wall St Community span roughly US$180 to about US$297 per share, showing how far apart individual views can be. Against that spread, the recent margin gains driven by hardware performance raise important questions about how resilient earnings might be if reimbursement terms or device pricing were to come under pressure, so it makes sense to compare several of these viewpoints before drawing your own conclusions.

Explore 7 other fair value estimates on ResMed - why the stock might be worth 29% less than the current price!

Build Your Own ResMed Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ResMed research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free ResMed research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ResMed's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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