ResMed (RMD) Stock Forecast & Price Target

ResMed's recent financial performance highlights a strong gross margin of 62.3%, which surpassed consensus estimates by 40 basis points, contributing positively to the company's overall profitability and confidence in future guidance. The company's earnings per share (EPS) of $2.81 exceeded prior estimates, aided by foreign exchange benefits, emphasizing the effective management of costs and operational efficiencies. Additionally, mask sales demonstrated robust growth at +16% year-over-year, outpacing market expectations, indicating a strong demand trajectory in the face of structural market growth driven by increasing diagnoses of sleep apnea and demographic trends.

ResMed's management has reduced its FY26 growth outlook for its segment to a mid-single-digit percentage increase, down from a previously expecting high-single-digit increase, signaling potential challenges ahead. Despite an overall revenue increase in its device business to $448 million, international results showed weaknesses, particularly with the out-of-U.S. device sales falling short of consensus expectations and only growing at 5% year-over-year. Furthermore, the anticipated disruption to positive airway pressure (PAP) device volumes due to the rise of GLP-1 drugs poses additional concerns over the company's long-term revenue sustainability and competitive positioning against resurgent rivals like Philips.