ResMed is a $45bn global medical technology leader focused on sleep apnea and respiratory care, and the clear market leader in sleep-disordered breathing. Its core business centres on CPAP devices and masks, increasingly cloud-connected to improve outcomes and reduce healthcare costs, while a growing SaaS division (e.g. Brightree, MatrixCare) expands its exposure to home-based care. Operating in 140+ countries, ResMed sits at the centre of the shift toward digital and at-home healthcare.
In our opinion, the stock has been soft through 2026, more around perception than fundamentals, although downgrades in the sector with US exposure aren’t helping – over 60% of RMD’s revenue comes from the US. ResMed’s underlying business remains solid. The weakness in the share price has been driven more by sentiment, competition and sector weakness than any material deterioration in fundamentals – the stock is trading ~35% below its average 5-year valuation while revenue is forecast to grow by 20% from FY25 to $6.1bn in FY27. A few points have weighed on the stock in recent times:
GLP-1 fears were overdone: The biggest overhang has been the rise of weight-loss drugs like Ozempic. The market initially feared these would reduce sleep apnea rates and crush CPAP demand. In reality, the data suggest the opposite: GLP-1 users are actually more likely to start CPAP therapy. Most sleep apnea patients aren’t eligible for these drugs, and with ~80% of cases still undiagnosed, increased engagement with healthcare is more likely to expand the market than shrink it.
Competitor Philips is returning = the tailwind is reversing: ResMed was a major beneficiary of the Philips recall in 2021, which boosted market share. That tailwind is now fading as Philips re-enters the market, bringing competition back into focus.
Slowing growth has driven the share price de-rating: Growth is moderating, with respiratory segment growth now expected to be mid-single digits. For a stock that traded on a premium multiple, even a modest slowdown has triggered a sharp valuation reset.
The stock has underperformed the broader market, falling more than 30% from its 2025 high, in a rising market. We bought RMD at the end of February, and our position is still currently on the wrong side of the ledger. Moving forward, the key risk to watch is competition from Philips. But with sentiment still subdued and the core business intact, this increasingly looks like a valuation reset on a quality company — not a broken story.
- We have RMD on watch as it tests its 12-month low, but its valuation and quality are compelling – MM is long RMD in our Active Growth Portfolio.
MM is long and cautiously bullish towards RMD around $31
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