ResMed (RMD): Assessing Valuation as Shares Pull Back Following Strong Start to the Year

ResMed (RMD) shares have caught the eye lately, with the stock showing some notable swings over the past month. Investors are weighing recent performance alongside broader healthcare sector trends, looking for signals about the company’s direction.

See our latest analysis for ResMed.

After a strong start to the year, ResMed’s share price has pulled back in recent weeks, dropping 8.8% over the past month and 14.6% over the last quarter. While that has paused the momentum a bit, the stock’s one-year total shareholder return of 5.1% still reflects steady progress for longer-term investors.

If you’re interested in what else the healthcare sector has to offer, check out the full range of companies in our discovery screener: See the full list for free.

With shares down from recent highs, but with robust long-term gains and analyst targets still well above today’s price, the big question is whether ResMed now offers a bargain for investors or if the market has already priced in future growth.

Most Popular Narrative: 17.2% Undervalued

With ResMed’s fair value estimated at $295.13 per share and the last close at $244.46, the narrative points to a significant gap between the current price and what is seen as justified by future earnings potential.

*Strategic investments in expanding the diagnosis and treatment funnel, including acquisitions like VirtuOx, Ectosense, and Somnoware, are improving patient flow from screening to therapy. This positions ResMed to capture a larger share of the substantial underpenetrated global sleep apnea and respiratory market, supporting long-term revenue growth.*

Read the complete narrative.

Is this price target just optimism, or is there something built into the forecasts? The narrative hinges on a handful of aggressive assumptions about how fast revenues, margins, and earnings could scale over the next three years. Curious what the most followed logic driving this fair value really is? Get the full story before the market does.

Result: Fair Value of $295.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, potential headwinds such as slowing U.S. market growth and increased competition from alternative therapies could challenge the bullish narrative in the period ahead.

Find out about the key risks to this ResMed narrative.

Build Your Own ResMed Narrative

If you see the picture differently or want to dig into the details yourself, it takes just a few minutes to craft your own perspective and analysis. Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding ResMed.

Looking for More Investment Ideas?

Step confidently into your next opportunity. The market never stands still, and new leaders are emerging every week. Don’t let outstanding possibilities slip by—put your capital to work with smart, timely choices.

• Capture income potential from companies sharing their profits by tapping into these 16 dividend stocks with yields > 3% with yields above 3%.
• Uncover rapid innovators shaping the medical future by using these 32 healthcare AI stocks at the intersection of healthcare and artificial intelligence.
• Target stocks pricing in less than their intrinsic value, and access these 886 undervalued stocks based on cash flows for cash flow bargains across the market.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com