Update shared on 21 Oct 2025
Fair value Increased 1.12%Analyst Commentary Highlights Margin Optimism as ResMed Faces Market Headwinds and Patent Challenge
Analysts have raised their price target for ResMed to $295 from $292, citing improved profit margin expectations and better anticipated gross margin expansion. This comes despite concerns over slower market growth dynamics.
Analyst Commentary
Recent analyst reports provide a balanced view on ResMed's outlook, highlighting both promising opportunities and areas of caution. The following summarizes the key bullish and bearish takeaways from the latest street research:
Bullish Takeaways
- Analysts view gross margin expansion over the next several years as an underappreciated driver of upside. Some expect stronger performance than current consensus estimates.
- The potential for better-than-expected profitability has led to upward revisions in price targets. This reflects confidence in management's ability to execute on operational efficiency.
- Long-term growth prospects, particularly looking ahead to fiscal 2027, remain attractive and could justify higher valuations if margin improvements are realized.
Bearish Takeaways
- Slowing U.S. Positive Airway Pressure (PAP) market growth is a concern. Recent surveys suggest current demand trends may fall short of overall Street expectations.
- The rise in GLP-1 medication uptake could be dampening traditional device demand. This presents near-term headwinds to volume growth.
- Analysts caution that upside to consensus device and mask unit growth may be limited. Survey data implies prescriptions from primary care physicians are not captured, and overall market dynamics are mixed.
What's in the News
- Fractus has filed a patent infringement complaint against ResMed in the United States District Court for the Southern District of California. The complaint alleges the company’s sleep apnea devices and connected therapy solutions violate multiple antenna technology patents (Key Developments).
- ResMed completed a share repurchase of 418,734 shares valued at $100 million between April and June 2025. This brings total buybacks under the current program to over 9.2 million shares and $863.37 million (Key Developments).
- The board of directors declared a quarterly cash dividend of $0.60 per share, with a record date of August 14, 2025, and payment on September 18, 2025 (Key Developments).
- ResMed is actively seeking tuck-in acquisitions and plans to continue investing in R&D and share buybacks, according to management commentary during the fourth quarter fiscal 2025 earnings call (Key Developments).
Valuation Changes
- Fair Value Estimate has risen slightly from $291.86 to $295.13, reflecting improved margin expectations.
- Discount Rate has edged down minimally from 7.44% to 7.43%.
- Revenue Growth projection has decreased marginally, now at 7.72% compared to the previous 7.75%.
- Net Profit Margin forecast has increased modestly from 28.76% to 28.95%.
- Future P/E Ratio estimate is up slightly from 28.14x to 28.49x.
Disclaimer
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