10Y annualized return is
very good
at 15.0% per year
RMD has met or exceeded earnings expectations in
the majority of
recent quarters (8/10)
Moderate Price-to-Earnings Ratio
Strong Price-to-Sales Ratio
Strong Return on Equity
Healthy Profit Margins
Low Debt Levels
Strong Liquidity Ratios
🏆 Strong Revenue Growth
🔑 Competitive Advantage in Innovation
🌐 Global Market Presence
🚀 Growth from Emerging Trends
💡 Digital Health Expansion
High Price-to-Cash Flow Ratio
Elevated EV/EBITDA Ratio
Dividend Yield is Low
Cash Ratio Reflects Limited Cash Reserves
⚠️ Currency Exchange Risks
ResMed demonstrates strong business quality with robust revenue growth, competitive advantages through innovation, and a significant global market presence. Future prospects look favorable with emerging trends in sleep health and digital health expansion, despite potential risks from currency impacts.
Analysis Date: January 30, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
ResMed Inc. makes medical devices and software that help people with breathing problems, especially those who have sleep apnea. They create products like masks and machines that help people breathe better at home or in hospitals. Additionally, they offer helpful software that allows doctors to monitor patients' health remotely. Founded in 1989 and based in San Diego, California, ResMed sells its products to hospitals and health clinics in around 140 countries.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$327.35
Current Market Price: $205.18
IV/P Ratio: 1.60x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
37.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for RMD
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (24.13)
P/B ratio ≤ 1.5 (5.74)
Current ratio ≥ 2.0 (3.33x)
Long-term debt < Net current assets (0.40x)
Margin of safety (37.0%)
RMD does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
25.18%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
57.94%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
25.35%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The return on equity of 25.05% indicates that the company is effective in generating profits from its equity base, showcasing strong management performance.
Gross profit margin at 57.94%, operating profit margin at 31.67%, and net profit margin at 25.35% reflect a solid ability to convert sales into actual profits.
With a dividend yield of only 0.93%, the stock may not be attractive for income-focused investors, indicating that it is primarily geared toward growth.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.16x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q2 2025
Current Ratio
Current assets divided by current liabilities
3.33x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q2 2025
With a debt-to-equity ratio of 0.16 and a debt-to-assets ratio of 0.12, the company maintains a strong balance sheet with minimal reliance on debt.
A current ratio of 3.33 and a quick ratio of 2.29 indicate that the company has ample liquidity to cover its short-term liabilities.
The cash ratio of 0.61 indicates that while liquidity is strong, the actual cash reserves may be limited compared to current liabilities, which could pose a risk in times of financial stress.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
ResMed achieved a global revenue growth of 10% year-over-year, reflecting consistent performance across its sleep health, breathing health, and residential care software portfolios. Device sales grew double-digits, underlining the strong market demand.
ResMed's investment in R&D, amounting to 6-7% of revenues, supports continuous innovation in their product offerings, including advancements in cloud-connectable medical devices and digital health ecosystems.
Operating in over 140 countries, ResMed has established a strong global presence, which enhances its ability to leverage diverse market opportunities and adapt to regional healthcare needs.
ResMed is well-positioned to benefit from the rising awareness of sleep health, driven by consumer tech companies like Apple and Samsung, which are integrating sleep apnea detection into their devices.
The ongoing development of digital health solutions and collaborations, such as the partnership with Apple for the Vision Pro accessory, positions ResMed to capture new market segments and enhance patient engagement.
Future revenue may be negatively impacted by currency fluctuations, as indicated by the expected $15 million to $20 million negative impact in Q3 due to foreign currency movements.
