ResMed (RMD) Could Be 14% Undervalued On Its Sleep Health Growth Story
ResMed stock performance and business snapshot
ResMed (RMD) has drawn investor attention after recent share price gains over the past week and month, set against weaker returns over the past year and year to date.
The stock last closed at US$214.29, giving the company a market value of about US$30.1b. Reported annual revenue stands at US$5.54b with net income of US$1.52b, supported by two main segments in sleep and breathing health, and residential care software.
See our latest analysis for ResMed.
Recent momentum in ResMed’s share price has picked up, with a 7 day share price return of 11.1% and 30 day share price return of 8%, yet the 1 year total shareholder return is down 22%. This pattern suggests sentiment has recently improved, which may reflect changing views on the company’s growth prospects or risk profile after a weaker period.
If you are comparing ResMed’s recent rebound with other opportunities in healthcare technology, it could be a good moment to see what else is moving through our screener of 41 healthcare AI stocks.
ResMed’s sharp short term rebound sits against a weaker multi year return record, which raises a simple question: Are investors now paying more for the same business story, or has the recent move reset the valuation case entirely?
Most popular ResMed narrative: 13.6% undervalued
ResMed’s most followed narrative pegs fair value at about $247.93 per share, compared with the last close at $214.29, which implies a valuation gap that some investors will want to understand in more detail.
Strategic investments in expanding the diagnosis and treatment funnel, including acquisitions like VirtuOx, Ectosense, and Somnoware, are improving patient flow from screening to therapy and positioning ResMed to capture a larger share of the substantial underpenetrated global sleep apnea and respiratory market. This supports long-term revenue growth.
Increased global awareness of sleep health issues, amplified by direct-to-consumer marketing campaigns and education programs for primary care physicians, is driving higher diagnosis and treatment rates. This is translating to elevated demand for ResMed's products and sustained top-line revenue growth.
Want to see why this narrative assigns a higher price tag to ResMed than the market does today? The whole case hangs on how earnings, revenue mix, and margins are expected to evolve together. The specific growth path, profitability profile, and future profit multiple behind that fair value might surprise you.
Result: Fair Value of $247.93 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, ResMed’s story could shift quickly if US reimbursement pressure returns, or if GLP 1 therapies and new devices start to pull demand away from its hardware.
Find out about the key risks to this ResMed narrative.
Next Steps
If the mixed tone around ResMed has you weighing the upside against the risks, it makes sense to move quickly and inspect the details yourself. To see what investors are optimistic about, take a closer look at the 4 key rewards.
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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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