ResMed Inc. (RMD)
Valuation Overview•Is ResMed Inc. Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
High-quality fundamentals with a strong composite quality score of 94/100, backed by robust profitability and solvency.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
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Verdict: Elite compounder with fortress-level fundamentals across every core pillar.
Wall Street sentiment is generally neutral. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
RMD exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins (highlighted by a massive 24.8% ROIC). This is backed by a fortress balance sheet, holding significant net cash ($643M) and minimal debt risk.
The company demonstrates solid revenue growth (10.2% 3Y CAGR) paired with robust earnings compounding (19.5% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 33.1% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.4B | +9.9% | +10.2% | +12.1% | +11.9% | |
| EBITDA | $494.7M | — | +17.4% | — | — | |
| Net Income | $418.4M | +8.8% | +19.3% | — | +15.8% | |
| EPS (Diluted) | $2.92 | +9.4% | +19.5% | +26.3% | +15.4% | |
| Free Cash Flow | $373.7M | -0.7% | +43.4% | +21.6% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 61.2% | 59.0% | 57.9% | 58.0% |
| Operating Margin | 33.1% | 31.6% | 29.9% | 27.1% |
| Net Margin | 27.8% | 25.3% | 23.8% | 20.0% |
| FCF Margin | 49.7% | 29.6% | 21.5% | 20.0% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q4'26Latest | $2.69 | $2.91 | +8.2% | ||
| Q3'26 | $2.89 | $2.95 | +2.1% | ||
| Q2'26 | $2.80 | $2.86 | +2.1% | ||
| Q1'26 | $2.74 | $2.81 | +2.6% | ||
| Q4'25 | $2.51 | $2.55 | +1.6% | ||
| Q3'25 | $2.46 | $2.55 | +3.7% | ||
| Q2'25 | $2.38 | $2.37 | -0.4% | ||
| Q1'25 | $2.32 | $2.43 | +4.7% |
Total return is -3.8% (1Y), lagging the benchmark by -13.5%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -2.4% | -10.0% | — |
| 1Y | -3.8% | -13.5% | +2.0% |
| 3YCAGR | +16.7% | -2.1% | +5.9% |
| 5YCAGR | -1.2% | -10.5% | +4.8% |
| 10YCAGR | +16.0% | +2.9% | — |
The S&P 500 is at 29.9x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about ResMed Inc. (RMD) valuation, health, and returns.
ResMed Inc. is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. trading near fair value (DCF: $258.13)
ResMed Inc. has multiple valuation anchors: DCF Intrinsic Value: $258.13 | Peer Relative Fair Value: $349.29 | Wall Street Analyst Target: $246.89 (implying +4.9% upside). A convergence of these signals offers higher conviction.
ResMed Inc. displays excellent financial health with a composite quality score of 94/100, supported by a Altman Z-Score of 11.3 (safe zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 24.8%.
ResMed Inc. pays a 1.0% dividend yield, covered by a 23% payout ratio with 14 years of growth, supplemented by a 2.1% buyback yield.
ResMed Inc.'s current growth trajectory is Stable. The company achieved +9.9% 1Y revenue growth and +9.4% 1Y EPS growth, compared to its 3Y revenue CAGR of +10.2%.
Wall Street consensus is Hold based on 36 analysts, beating EPS expectations in 92% of recent quarters with a 6-quarter streak. The consensus price target represents a +4.9% change from current levels.
Investment risks for ResMed Inc. include: -33.8% 1-year max drawdown. Volatility risk is characterized by a beta of 0.48x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.