Earnings Beat: ResMed Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

ResMed Inc. (NYSE:RMD) defied analyst predictions to release its quarterly results, which were ahead of market expectations. ResMed beat earnings, with revenues hitting US$1.2b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 15%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for ResMed

Taking into account the latest results, the most recent consensus for ResMed from 23 analysts is for revenues of US$5.03b in 2025. If met, it would imply a solid 9.6% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 25% to US$8.13. In the lead-up to this report, the analysts had been modelling revenues of US$4.98b and earnings per share (EPS) of US$7.67 in 2025. So the consensus seems to have become somewhat more optimistic on ResMed's earnings potential following these results.

The consensus price target was unchanged at US$215, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic ResMed analyst has a price target of US$264 per share, while the most pessimistic values it at US$180. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ResMed's past performance and to peers in the same industry. It's pretty clear that there is an expectation that ResMed's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.6% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.0% annually. Factoring in the forecast slowdown in growth, it looks like ResMed is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards ResMed following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ResMed going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for ResMed you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.