NYSE:RMD

Stock Analysis Report

Executive Summary

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software solutions that diagnose, treat, and manage respiratory disorders comprising sleep disordered breathing, chronic obstructive pulmonary disease, neuromuscular disease, and other chronic diseases.


Snowflake Analysis

Proven track record with moderate growth potential.


Similar Companies

Share Price & News

How has ResMed's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RMD has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.03%

RMD

-1.2%

US Medical Equipment

-2.7%

US Market


1 Year Return

75.4%

RMD

28.7%

US Medical Equipment

21.2%

US Market

Return vs Industry: RMD exceeded the US Medical Equipment industry which returned 28.4% over the past year.

Return vs Market: RMD exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

RMDIndustryMarket
7 Day0.03%-1.2%-2.7%
30 Day2.8%2.2%0.09%
90 Day9.5%8.4%6.9%
1 Year77.7%75.4%29.7%28.7%23.8%21.2%
3 Year148.3%137.3%90.9%85.6%48.1%38.6%
5 Year179.8%156.6%125.4%101.4%72.5%53.4%

Price Volatility Vs. Market

How volatile is ResMed's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ResMed undervalued compared to its fair value and its price relative to the market?

54.96x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RMD ($158.32) is trading above our estimate of fair value ($93.13)

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


Price To Earnings Ratio

PE vs Industry: RMD is poor value based on its PE Ratio (54.2x) compared to the Medical Equipment industry average (46.3x).

PE vs Market: RMD is poor value based on its PE Ratio (54.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: RMD is poor value based on its PEG Ratio (4.2x)


Price to Book Ratio

PB vs Industry: RMD is overvalued based on its PB Ratio (10.8x) compared to the US Medical Equipment industry average (4.1x).


Next Steps

Future Growth

How is ResMed forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

13.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RMD's forecast earnings growth (13% per year) is above the savings rate (1.7%).

Earnings vs Market: RMD's earnings (13% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: RMD's revenue (8.1% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: RMD's revenue (8.1% 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 (24.6%)


Next Steps

Past Performance

How has ResMed performed over the past 5 years?

2.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RMD has high quality earnings.

Growing Profit Margin: RMD's current net profit margins (15.5%) are higher than last year (13.9%).


Past Earnings Growth Analysis

Earnings Trend: RMD's earnings have grown by 2.8% per year over the past 5 years.

Accelerating Growth: RMD's earnings growth over the past year (25%) exceeds its 5-year average (2.8% per year).

Earnings vs Industry: RMD earnings growth over the past year (25%) underperformed the Medical Equipment industry 31%.


Return on Equity

High ROE: RMD's Return on Equity (19.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ResMed's financial position?


Financial Position Analysis

Short Term Liabilities: RMD's short term assets ($1.2B) exceed its short term liabilities ($550.5M).

Long Term Liabilities: RMD's short term assets ($1.2B) do not cover its long term liabilities ($1.5B).


Debt to Equity History and Analysis

Debt Level: RMD's debt to equity ratio (57.6%) is considered high.

Reducing Debt: RMD's debt to equity ratio has increased from 22.8% to 57.6% over the past 5 years.

Debt Coverage: RMD's debt is well covered by operating cash flow (47%).

Interest Coverage: RMD's interest payments on its debt are well covered by EBIT (15.9x coverage).


Balance Sheet

Inventory Level: RMD has a low level of unsold assets or inventory.

Debt Coverage by Assets: RMD's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

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

0.97%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%1.4%markettop25%3.7%industryaverage1.1%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: RMD's dividend (0.99%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: RMD's dividend (0.99%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, RMD has been paying a dividend for less than 10 years.

Growing Dividend: RMD's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52%), RMD's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RMD's dividends in 3 years are forecast to be well covered by earnings (36.6% payout ratio).


Next Steps

Management

What is the CEO of ResMed's salary, the management and board of directors tenure and is there insider trading?

6.8yrs

Average management tenure


CEO

Mick Farrell (47yo)

6.8yrs

Tenure

US$9,635,100

Compensation

Mr. Michael J. Farrell, also known as Mick, BE, SM, MBA has been the Chief Executive Officer of ResMed Inc. since March 1, 2013. Mr. Farrell served as President of Americas Operations at ResMed Inc. since  ...


CEO Compensation Analysis

Compensation vs Market: Mick's total compensation ($USD9.64M) is about average for companies of similar size in the US market ($USD10.76M).

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


Management Age and Tenure

6.8yrs

Average Tenure

56yo

Average Age

Experienced Management: RMD's management team is seasoned and experienced (6.8 years average tenure).


Board Age and Tenure

6.1yrs

Average Tenure

60yo

Average Age

Experienced Board: RMD's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

Insider Buying: RMD insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$438,28526 Nov 19
Richard McHale
EntityIndividual
Shares3,000
Max PriceUS$146.10
SellUS$204,48926 Nov 19
Lisette & Michael Farrell Family Foundation., Endowment Arm
EntityCompany
Shares1,370
Max PriceUS$149.26
SellUS$199,51220 Nov 19
Robert Douglas
EntityIndividual
Role
President
President & COO
Shares1,360
Max PriceUS$146.70
SellUS$603,86321 Aug 19
Ronald Taylor
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares4,429
Max PriceUS$136.34
SellUS$1,563,56331 Jul 19
Richard McHale
EntityIndividual
Shares12,306
Max PriceUS$127.06
SellUS$1,699,00927 Feb 19
Raj Sodhi
EntityIndividual
Role
Senior Key Executive
President of Software as a Service Business (SaaS)
Shares16,739
Max PriceUS$101.50

Ownership Breakdown

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


Management Team

  • Peter Farrell (77yo)

    Founder & Non-Executive Chairman

    • Tenure: 6yrs
    • Compensation: US$791.18k
  • David Pendarvis (60yo)

    Chief Administrative Officer

    • Tenure: 8.7yrs
    • Compensation: US$2.72m
  • Connie Bienfait

    Director of Investor Relations

    • Brett Sandercock (52yo)

      Chief Financial Officer

      • Tenure: 14yrs
      • Compensation: US$2.91m
    • Rob Douglas (59yo)

      President & COO

      • Tenure: 6.8yrs
      • Compensation: US$6.43m
    • Mick Farrell (47yo)

      CEO & Director

      • Tenure: 6.8yrs
      • Compensation: US$9.64m
    • Jim Hollingshead (56yo)

      President of Sleep Business

      • Tenure: 8.7yrs
      • Compensation: US$3.27m
    • Raj Sodhi (46yo)

      President of Software as a Service Business (SaaS)

      • Tenure: 2.5yrs
      • Compensation: US$2.93m
    • Bobby Ghoshal

      Chief Technology Officer

      • Tenure: 1.8yrs
    • Amy Wakeham

      Vice President of Investor Relations & Corporate Communications


      Board Members

      • Rich Sulpizio (69yo)

        Independent Director

        • Tenure: 14.4yrs
        • Compensation: US$329.98k
      • Peter Farrell (77yo)

        Founder & Non-Executive Chairman

        • Tenure: 6yrs
        • Compensation: US$791.18k
      • Ron Taylor (71yo)

        Lead Independent Director

        • Tenure: 6.5yrs
        • Compensation: US$344.98k
      • Jan De Witte (55yo)

        Non-Executive Director

        • Tenure: 0.7yrs
        • Compensation: US$133.17k
      • Harjit Gill (54yo)

        Independent Director

        • Tenure: 1.2yrs
        • Compensation: US$288.17k
      • Mick Farrell (47yo)

        CEO & Director

        • Tenure: 6.8yrs
        • Compensation: US$9.64m
      • Carol Burt (61yo)

        Independent Director

        • Tenure: 6.2yrs
        • Compensation: US$332.98k
      • Karen Drexler (59yo)

        Independent Director

        • Tenure: 2.2yrs
        • Compensation: US$314.98k

      Company Information

      ResMed Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: ResMed Inc.
      • Ticker: RMD
      • Exchange: NYSE
      • Founded: 1989
      • Industry: Health Care Equipment
      • Sector: Healthcare
      • Market Cap: US$23.095b
      • Shares outstanding: 143.79m
      • Website: https://www.resmed.com

      Number of Employees


      Location

      • ResMed Inc.
      • 9001 Spectrum Center Boulevard
      • San Diego
      • California
      • 92123
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      RMDNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1995
      RMEDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1995
      0KW4LSE (London Stock Exchange)YesCommon StockGBUSDJun 1995
      RMDWBAG (Wiener Boerse AG)YesCommon StockATEURJun 1995
      RMD *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJun 1995
      RMDASX (Australian Securities Exchange)CDI COM USD0.004 (10CDI/1SHS)AUAUDNov 1999
      RSMD.FOTCPK (Pink Sheets LLC)CDI COM USD0.004 (10CDI/1SHS)USUSDNov 1999
      RMEADB (Deutsche Boerse AG)CDI COM USD0.004 (10CDI/1SHS)DEEURNov 1999
      RMDCHIA (Chi-X Australia)CDI COM USD0.004 (10CDI/1SHS)AUAUDNov 1999
      RMDCHIA (Chi-X Australia)CDI COM USD0.004 (10CDI/1SHS)AUAUDNov 1999

      Biography

      ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software solutions that diagnose, treat, and manage respiratory disorders comprising sleep disordered breathing, chronic obstructive pulmonary disease, neuromuscular disease, and other chronic diseases. The company operates through two segments, Sleep and Respiratory Care, and Software as a Service (SaaS). 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, portable oxygen concentrators, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides humidifiers, carry bags, and breathing circuits; data communications and control products, such as AirView Diagnostics, EasyCare, ResLink, ResControl, ResControl II, TxControl, ResScan, and ResTraxx modules; U-Sleep, which enables automated patient coaching through a text, email, or interactive voice phone call; AirView that enables remote monitoring, over-the-air trouble shooting, and changing of device settings; and myAir, a patient engagement application that offers sleep data and a daily score based on their previous night’s data, as well as S+, connectivity module, and propeller solutions. In addition, it provides business management software and services to out-of-hospital providers, home medical equipment, pharmacy, home infusion, orthotics, and prosthetics; and healthcare-first and matrixcare solutions. The company markets its products to sleep clinics, home healthcare dealers, patients, hospitals, physicians, and third-party payers through a network of distributors and direct sales force in approximately 120 countries. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/27 23:52
      End of Day Share Price2020/01/27 00:00
      Earnings2019/09/30
      Annual Earnings2019/06/30


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.