RMD’s recent earnings saw a few upgrades to the stock, but the gains were short-lived, and it has drifted back towards its multi-month lows. However, we like the narrative unfolding at RMD with Ozempic-style drugs actually increasing demand for sleep devices as consumers become more focused on their health, with wearable devices such as smartwatches highlighting sleep apnoea and sleep quality in general. The company is growing revenue nicely with a 10% lift expected in FY26 and F27 which, combined with an extremely strong balance sheet and likely further buybacks, supports the stock into weakness. Plus, with the healthcare sector in the “naughty corner”, RMD is trading well over 20% below its average 5-year valuation.
- We can see another test on the downside by RMD, but we will be considering the stock into such a move.
MM is bullish towards RMD around $35
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