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what it is
ResMed sells sleep apnea machines, masks, and software that help people breathe and sleep at home.
how it gets paid
Last year Resmed made $5.1B in revenue. Masks and accessories was the main engine at $2.3B, or 44% of sales.
why it's growing
Revenue grew 9.8% last year. The beat was $0.16 per share, or 6.0% above estimates.
what just happened
ResMed's latest quarter beat estimates because $2.81 EPS topped the $2.65 view.
At a glance
A balance sheet — strong enough to weather a downturn
90/100 earnings predictability — you can trust these numbers
26.8x trailing p/e — priced about right
1.0% dividend yield — cash in your pocket every quarter
18.0% return on capital — nothing to write home about
xvary composite: 76/100 — average
What they do
ResMed sells sleep apnea machines, masks, and software that help people breathe and sleep at home.
ResMed is everywhere: 140 countries, 9,980 employees, and a mask people keep replacing. Hardware was 88% of FY24 revenue. Software was 12%. That means your gear keeps cycling, and your data stays inside the system. Leaving is painful.
How they make money
$5.1B
annual revenue · their business grew +9.8% last year
Masks and accessories
$2.3B
Ventilation devices
$2.3B
Software and remote monitoring
$0.6B
The products that matter
sleep therapy devices, masks, and related care tools
Core Sleep-Respiratory Franchise
$5.1B revenue base · +9.8% growth
The data set here is blunt, but blunt is fine when the business is this consistent. You are effectively underwriting one core franchise that turned $5.1B of sales into a 27.2% net margin. That is not a science project. That is an operating machine.
27.2% net margin
consumables and replacement demand
Masks & Ongoing Supply Pull
economics implied, not fully broken out here
We are thin on formal segment numbers, so we are staying honest about that. But a medical-device business with 90/100 earnings predictability usually gets there through repeat use and steady reorder behavior, not through one-off equipment spikes.
90/100 predictability
software and provider workflow tools
Connected Care Layer
real business, limited disclosure in this snapshot
Here is the disciplined take: the company clearly sells more than boxes, but this page does not have enough segment detail to quantify the software mix cleanly. So the right move is to watch margins and retention proxies, not invent a software thesis from thin air.
watch the margins
Key numbers
34.5%
operating margin
Operating margin means profit after running the business. 34.5% says ResMed keeps 35 cents from each sales dollar.
18.0%
return on capital
Return on capital means profit from each dollar tied up in the business. 18.0% says the money works hard.
26.8x
trailing P/E
Trailing P/E means price divided by last year's earnings. 26.8x is rich for a med device maker.
1.0%
dividend yield
Dividend yield means cash paid to shareholders each year. 1.0% is nice, but this is not an income stock.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 65 / 100
- long-term debt $409M (1% of capital)
- net profit margin 27.0% — keeps 27 cents of every dollar in revenue
- return on equity 19% — $0.19 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in RMD 3 years ago → it's now worth $11,320.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
ResMed's latest quarter beat estimates because $2.81 EPS topped the $2.65 view.
Revenue was $2.8B, and gross margin was 61.6%. EDGAR lists EPS at $5.05, while Yahoo Finance shows $2.81, so the figures do not line up cleanly.
$2.8B
revenue
$2.81
eps
61.6%
gross margin
the number that mattered
The beat was $0.16 per share, or 6.0% above estimates. That keeps the margin story alive.
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resmed likely posted healthy results for the second quarter of fiscal 2026 (ended december 31st).
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the company is scheduled to report earnings shortly after this report goes to press.resmed began fiscal year 2026 in a similar manner to how it concluded fiscal 2025, namely by demonstrating continued momentum.
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september-period revenues increased 9% vs. prior year on a reported basis (8% in constant-currency), driven by sustained global demand for its portfolio of sleep devices, masks, and accessories.
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non-gaap gross margin expanded 280 basis points to 62.0%, driven by manufacturing and logistics efficiencies, along with component cost improvements.
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non-gaap operating income increased 19% to $482.1 million, leading to adjusted diluted earnings per share of $2.55, a 16% increase over the prior-year period.
source: company earnings report, 2026
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What could go wrong
ResMed's risk is not "people stop needing sleep therapy." The risk is that a premium-margin, premium-multiple medical device company gets hit where healthcare names usually get hit: reimbursement, product scrutiny, or margin compression.
med
reimbursement pressure hits the premium first
If payors or home-care channels push harder on pricing, a 27.2% net-margin business feels it quickly. The whole point of owning RMD at 26.8x earnings is that the economics look better than average medtech.
If pricing weakens, you do not just lose margin. You lose the reason the stock gets special treatment.
med
regulatory, recall, or litigation trouble
This is a medical-device company selling products tied to patient outcomes. Recalls, compliance findings, or product-liability issues would not be a side show. They would land on the core $5.1B revenue base.
The balance sheet can absorb a lot. The market's trust in the quality story is harder to rebuild.
med
62.0% gross margin turns out to be the high-water mark
Recent execution looked excellent, with adjusted gross margin at 62.0% after a 2.8-point expansion. If freight, components, or product mix move the wrong way, earnings growth slows faster than revenue growth.
That matters because the stock is priced for steady margin discipline, not for a giveback.
med
good business, already-known story
The stock trades at about 24.1x forward earnings and 26.8x trailing earnings. That is not bubble pricing, but it is expensive enough that a clean quarter can still get a shrug if the market already expected it.
You can be right on the business and still get a mediocre stock result. The last 3 years already showed you that.
The key insight: this is less a demand-risk story than a quality-premium story. If the quality signals crack, the multiple is the next thing to notice.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
gross margin staying near 62.0%
That was the operating tell in the last report. If it holds, the premium multiple still has a case. If it fades, the story gets ordinary fast.
trend
revenue growth still starting with a high single digit
Sales grew 9.8% last year and 9% in the September quarter. You do not need hypergrowth here. You do need consistency.
risk
reimbursement or product headlines
This is where a quiet healthcare stock gets loud. Pricing pressure, recalls, or compliance issues would hit both earnings and sentiment.
calendar
the next earnings print
You want the same combo as last time: real demand plus margin discipline. A revenue beat with weaker margins is less impressive than it sounds.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they think the quality story still has room.
risk profile
average
stability score 3 — not a bunker stock, not chaos either. You are taking business-quality risk more than balance-sheet risk.
chart momentum
average
technical score 3 — no dramatic trend signal. The business is doing more of the heavy lifting than the chart.
earnings predictability
90 / 100
Management has been consistent. You usually get fewer nasty surprises here than in faster-moving medtech names.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 449 buyers vs. 381 sellers in 3q2025. total institutional holdings: 91.9M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$215
$388
$255
current price
$302
target midpoint · +18% from current · 3-5yr high: $485 (+90% · 18% ann'l return)
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