ResMed (RMD): Evaluating Valuation After Strong Q1 Results and Renewed Analyst Optimism

ResMed (RMD) has caught investor attention following its Q1 results, which showed steady growth in both revenue and net income. The stock pulled back slightly, but longer-term sentiment remains constructive.

See our latest analysis for ResMed.

ResMed’s share price has pulled back in recent weeks after an earlier rally, reflecting a mix of excitement from strong Q1 financials and some short-term profit-taking. Over the past year, the total shareholder return sits just above break-even. Looking long term, returns remain solid and the company’s underlying growth signals continue to build momentum.

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With shares trading below recent highs while analyst targets remain well above the current price, the question for investors is clear: Is ResMed undervalued at these levels, or is future growth already fully priced in?

Most Popular Narrative: 15% Undervalued

The most widely followed narrative now places ResMed's fair value around $295, a solid margin above the last close at $249.65. This difference comes as analysts digest margin optimism following recent results and evolving industry headwinds.

Operational efficiencies and increased awareness in sleep health strengthen competitive advantages, fueling long-term earnings expansion and greater profitability. Ongoing innovation in product development, including new releases of CPAP devices, mask interfaces, and integration of AI-driven features, strengthens ResMed's competitive differentiation and supports premium pricing power. This drives both revenue and margin expansion.

Read the complete narrative.

Curious why analysts are betting on higher margins and innovation as game-changers? The secret lies in bold recurring revenue projections and big leaps in core profitability. Want to see the surprising financial targets behind this 15% upside call? Find out what’s fueling the consensus and why bulls say the real story is just beginning.

Result: Fair Value of $295 (UNDERVALUED)

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

However, risks such as slowing U.S. device demand and growing competition from alternative therapies could challenge ResMed’s growth story if these trends accelerate.

Find out about the key risks to this ResMed narrative.

Build Your Own ResMed Narrative

If you see the numbers differently or want to dig even deeper into the details, you can craft your own ResMed narrative in under three minutes. So why not Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding ResMed.

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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.

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