ResMed (NYSE:RMD) - Share price, News & Analysis

Q: What is the Fair Price of RMD when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RMD ($239.99) is trading above our estimate of [[fair value]] ($171.8)

RMD fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	2/6
Past Performance	6/6
Financial Health	6/6
Dividends	0/6

RMD Stock Overview

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets.

Rewards

Earnings are forecast to grow 11.67% per year

Earnings grew by 64.3% over the past year

Risk Analysis

No risks detected for RMD from our risk checks.

ResMed Competitors

IDEXX Laboratories

NasdaqGS:IDXX

US$33.0b

Baxter International

NYSE:BAX

US$30.4b

Zimmer Biomet Holdings

NYSE:ZBH

US$24.6b

Edwards Lifesciences

NYSE:EW

US$65.0b

Price History & Performance

Summary of all time highs, changes and price drops for ResMed
Historical stock prices
Current Share Price	US$239.99
52 Week High	US$301.34
52 Week Low	US$189.40
Beta	0.47
1 Month Change	6.43%
3 Month Change	21.88%
1 Year Change	-12.76%
3 Year Change	78.51%
5 Year Change	228.44%
Change since IPO	35,619.44%

Recent News & Updates

Aug 11

ResMed Non-GAAP EPS of $1.49 beats by $0.03, revenue of $914.74M beats by $2.22M

ResMed press release (NYSE:RMD): Q4 Non-GAAP EPS of $1.49 beats by $0.03. Revenue of $914.74M (+4.4% Y/Y) beats by $2.22M. Non-GAAP gross margin grew 50 bps to 57.8%, non-GAAP operating profit up 4%. Operating cash flow for the quarter was $79.5 million, reflecting the impact of increases in working capital. During the quarter we paid $61.5 million in dividends.

Aug 02

ResMed acquires digital insomnia therapy company mementor to bolster sleep portfolio

ResMed (NYSE:RMD) acquired Leipzig-based mementor to bolster its sleep portfolio in Germany with a digital solution for insomnia. Financial terms of the transaction, which was completed Aug. 1, were not disclosed by ResMed. Mementor developed and owns a digital insomnia therapy solution called somnio, which is Germany's first and only permanently approved Digital Health Application (DiGA) in the field of sleep medicine and thus eligible for reimbursement in the country, ResMed said in an Aug. 2 press release. ResMed added that somnio is available in Germany via "app on prescription." ResMed noted that the acquisition lays foundation to build its digital sleep medicine portfolio in Germany Mementor will be integrated into ResMed in Germany as a separate business segment, which will be co-led by mementor Co-Founder and CEO Noah Lorenz and Katherina Jekerle, who was previously ResMed Germany's senior marketing director and member of German leadership team.

Shareholder Returns

	RMD	US Medical Equipment	US Market
7D	-0.7%	1.9%	3.2%
1Y	-12.8%	-19.1%	-10.2%

Return vs Industry: RMD exceeded the US Medical Equipment industry which returned -19.1% over the past year.

Return vs Market: RMD underperformed the US Market which returned -10.2% over the past year.

Price Volatility

Is RMD's price volatile compared to industry and market?
RMD volatility
RMD Average Weekly Movement	3.8%
Medical Equipment Industry Average Movement	9.4%
Market Average Movement	7.7%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: RMD is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: RMD's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1989	8,160	Mick Farrell	https://www.resmed.com

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. The company operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes.

ResMed Fundamentals Summary

How do ResMed's earnings and revenue compare to its market cap?
RMD fundamental statistics
Market Cap	US$35.14b
Earnings (TTM)	US$779.44m
Revenue (TTM)	US$3.58b

45.1x

P/E Ratio

9.8x

P/S Ratio

Is RMD overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RMD income statement (TTM)
Revenue	US$3.58b
Cost of Revenue	US$1.51b
Gross Profit	US$2.06b
Other Expenses	US$1.28b
Earnings	US$779.44m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	5.32
Gross Margin	57.68%
Net Profit Margin	21.78%
Debt/Equity Ratio	23.1%

How did RMD perform over the long term?

See historical performance and comparison

Dividends

0.7%

Current Dividend Yield

31%

Payout Ratio

Does RMD pay a reliable dividends?

See RMD dividend history and benchmarks

When do you need to buy RMD by to receive an upcoming dividend?
ResMed dividend dates
Ex Dividend Date	Aug 17 2022
Dividend Pay Date	Sep 22 2022
Days until Ex dividend	2 days
Days until Dividend pay date	38 days

Does RMD pay a reliable dividends?

See RMD dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is RMD undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RMD?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RMD. This is calculated by dividing RMD's market cap by their current preferred multiple.
What is RMD's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$35.14b

RMD key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	10x
Enterprise Value/EBITDA	31.8x
PEG Ratio	3.9x

Price to Earnings Ratio vs Peers

How does RMD's PE Ratio compare to its peers?

RMD PE Ratio vs Peers

The above table shows the PE ratio for RMD vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	52.3x
IDXX IDEXX Laboratories	49.7x	12.4%	US$33.0b
BAX Baxter International	30.1x	19.1%	US$30.4b
ZBH Zimmer Biomet Holdings	84.6x	22.1%	US$24.6b
EW Edwards Lifesciences	44.6x	10.1%	US$65.0b
RMD ResMed	45.1x	11.7%	US$35.1b

Price-To-Earnings vs Peers: RMD is good value based on its Price-To-Earnings Ratio (45.1x) compared to the peer average (52.3x).

Price to Earnings Ratio vs Industry

How does RMD's PE Ratio compare vs other companies in the US Medical Equipment Industry?

Price-To-Earnings vs Industry: RMD is expensive based on its Price-To-Earnings Ratio (45.1x) compared to the US Medical Equipment industry average (34.4x)

Price to Earnings Ratio vs Fair Ratio

What is RMD's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RMD PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	45.1x
Fair PE Ratio	34.4x

Price-To-Earnings vs Fair Ratio: RMD is expensive based on its Price-To-Earnings Ratio (45.1x) compared to the estimated Fair Price-To-Earnings Ratio (34.4x).

Share Price vs Fair Value

What is the Fair Price of RMD when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RMD ($239.99) is trading above our estimate of fair value ($171.8)

Significantly Below Fair Value: RMD is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is ResMed forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RMD's forecast earnings growth (11.7% per year) is above the savings rate (1.9%).

Earnings vs Market: RMD's earnings (11.7% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: RMD's earnings are forecast to grow, but not significantly.

Revenue vs Market: RMD's revenue (7.4% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: RMD's revenue (7.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RMD's Return on Equity is forecast to be high in 3 years time (21.8%)

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Past Performance

How has ResMed performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RMD has high quality earnings.

Growing Profit Margin: RMD's current net profit margins (21.8%) are higher than last year (14.8%).

Past Earnings Growth Analysis

Earnings Trend: RMD's earnings have grown by 16.4% per year over the past 5 years.

Accelerating Growth: RMD's earnings growth over the past year (64.3%) exceeds its 5-year average (16.4% per year).

Earnings vs Industry: RMD earnings growth over the past year (64.3%) exceeded the Medical Equipment industry 2.5%.

Return on Equity

High ROE: RMD's Return on Equity (23.2%) is considered high.

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Financial Health

How is ResMed's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RMD's short term assets ($1.9B) exceed its short term liabilities ($689.3M).

Long Term Liabilities: RMD's short term assets ($1.9B) exceed its long term liabilities ($1.0B).

Debt to Equity History and Analysis

Debt Level: RMD's net debt to equity ratio (14.9%) is considered satisfactory.

Reducing Debt: RMD's debt to equity ratio has reduced from 54.6% to 23.1% over the past 5 years.

Debt Coverage: RMD's debt is well covered by operating cash flow (45.3%).

Interest Coverage: RMD's interest payments on its debt are well covered by EBIT (44.8x coverage).

Balance Sheet

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Dividend

What is ResMed current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.73%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: RMD's dividend (0.73%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: RMD's dividend (0.73%) is low compared to the top 25% of dividend payers in the US market (3.95%).

Stability and Growth of Payments

Stable Dividend: RMD is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: RMD is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: RMD is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: RMD is not paying a notable dividend for the US market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

7.7yrs

Average management tenure

CEO

Mick Farrell (50 yo)

9.42yrs

Tenure

US$10,389,315

Compensation

Mr. Michael J. Farrell, also known as Mick, BE, SM, MBA, serves as Member of Advisory Board at Green Sun Medical, LLC. He serves as the Chief Executive Officer of ResMed Pty Ltd. Mr. Farrell has been the C...

CEO Compensation Analysis

Compensation vs Market: Mick's total compensation ($USD10.39M) is about average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Mick's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: RMD's management team is seasoned and experienced (7.7 years average tenure).

Board Members

Experienced Board: RMD's board of directors are considered experienced (6.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/14 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/30
Annual Earnings	2022/06/30