ResMed Inc. engages in the digital health and cloud-connected medical devices business in the United States and internationally. It operates in two segments, Sleep and Breathing Health, and Residential Care Software. The company offers sleep recorders for the diagnosis and titration of sleep apnea in sleep clinics, hospitals, and at home, including ApneaLink Air, a portable diagnostic device that measures oximetry, respiratory effort, pulse, nasal flow, and snoring; NightOwl, a portable, cloud-connected, and disposable diagnostic device that measures AHI based on derived peripheral arterial tone, actigraphy, and oximetry; and EasyCare Tx, a sleep lab solution. It also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; and connectivity module which provides a cellular connection between compatible ventilation devices and AirView system. In addition, the company offers Brightree solutions which are solutions and services for organizations in home medical equipment and pharmacy, orthotic and prosthetic, and home infusion; HEALTHCAREfirst solutions that offers electronic health record, software, billing and coding services, and advanced analytics that enables home health and hospice agencies to optimize clinical, financial and administrative processes; MatrixCare EHR software as a service solutions used by skilled nursing and senior living providers, life plan communities, and home health and hospice sectors; and MEDIFOX DAN software solutions that is used by residential care providers, such as home health and nursing home providers. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.
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ResMed Reports 9% Quarterly Revenue Growth and Fiscal 2027 Guidance
ResMed reported fourth-quarter fiscal 2026 revenue of $1.5 billion, up 9% year over year, with non-GAAP earnings per share rising 16% to $2.95. For the full fiscal year ended June 30, 2026, revenue grew 10% and free cash flow topped $1.6 billion. The company also issued fiscal 2027 guidance calling for reported EPS growth of 7% to 10%, and announced a 10% dividend increase to $0.66 per share. However, life support device revenue fell 45% in the Americas and 38% elsewhere after ResMed suspended new Astral ventilator sales under a field safety action, booking a $42 million provision and expecting a roughly $75 million revenue hit in fiscal 2027. Free cash flow fell 21% to $404 million, and the pending MatrixCare divestiture is expected to dilute EPS by about $0.30.
ResMed reported second-quarter revenue of $1.46 billion, in line with analyst estimates and up 8.6% year over year, but its operating margin fell to 30.7% from 33.7% a year earlier, prompting a negative market reaction. Management attributed the margin compression to higher R&D and supply chain costs amid inflation, and the company took a $42 million charge for a field safety action on its Astral devices, with future Astral sales suspended for now. Adjusted EPS of $2.95 beat analyst estimates of $2.89. During the earnings call, analysts questioned management about gross margin drivers, guidance range, acquisition strategy focused on tuck-in deals of $100 million to $500 million, the Astral charge, and the impact of oral GLP-1s on new patient funnel dynamics.
ResMed lifts dividend 10% and completes $1.4 billion buyback but flags softer fiscal 2027 outlook after ventilator recall
ResMed reported higher fourth-quarter and full-year sales and earnings, raised its quarterly dividend by 10% to US$0.66, and completed a US$1.40 billion share buyback program. Management issued a softer fiscal 2027 outlook tied to suspended Astral ventilator sales following an FDA Class 1 recall and ongoing cost pressures, with the ventilator suspension expected to create a US$75 million revenue headwind. The company’s narrative projects US$6.5 billion in revenue and US$1.8 billion in earnings by 2029, though some analysts had previously assumed revenue near US$6.8 billion and earnings near US$1.8 billion by that year.
ResMed shares fall despite fiscal Q4 earnings beat and revenue growth
ResMed shares dropped 2.8% in after-market trading despite reporting fiscal fourth-quarter adjusted earnings of $2.95 per share, up 16% year over year and beating the Zacks Consensus Estimate by 1.72%. Full-year adjusted EPS reached $11.17, a 17% increase, while fourth-quarter revenues rose 9% to $1.46 billion, slightly above estimates. For fiscal 2027, the company expects adjusted EPS between $12.00 and $12.25, implying reported growth of about 7% to 10%, with the Zacks Consensus Estimate currently at $12.02 per share. ResMed also projected full-year reported revenues of $5.75 billion to $5.85 billion, below the consensus of $6.03 billion, and noted a roughly $75 million headwind from suspended Astral sales.
ResMed Faces Earnings Test With Wall Street Projecting $2.90 EPS and $1.46 Billion Revenue
ResMed is approaching its upcoming earnings report with Wall Street projecting quarterly earnings of $2.90 per share and revenue of about $1.46 billion. The stock has rebounded recently, posting a 7-day share price return of 4.55% and a 90-day return of 8.28%, though the year-to-date return remains down 8.49% and the one-year total shareholder return has declined 19.34%. A widely followed narrative values ResMed at $247.93 per share, framing the stock as modestly undervalued relative to its last close of $224.03, supported by growth in home-based, cloud-connected therapy solutions and digital health platforms that enhance recurring high-margin revenue. However, risks include competitive pressure from GLP-1 therapies, a potential re-entry by Philips Respironics, and tighter reimbursement policies that could weigh on device demand and pricing.
StockStory Highlights ResMed and StoneX as Mid-Cap Picks, Flags US Foods as Underperformer
StockStory identifies ResMed and StoneX as mid-cap stocks with exciting potential, while recommending investors avoid US Foods. ResMed, a developer of cloud-connected respiratory medical devices, posted average constant currency revenue growth of 9.1% over the past two years and annual earnings per share growth of 15.2% over five years, with its free cash flow margin expanding by 21.4 percentage points. StoneX, a global financial services network, achieved 44.3% annual revenue growth and 29.6% annual earnings per share growth over the last two years, alongside 16.9% annual tangible book value per share growth over five years. In contrast, US Foods, a major foodservice distributor, showed only 2.4% average unit sales growth over two years, substandard operating margins, and a lack of free cash flow generation, limiting reinvestment potential.
Resmed Sells MatrixCare to Frazier Healthcare to Focus on Connected Care
Resmed has agreed to sell its MatrixCare business to private equity firm Frazier Healthcare Partners, sharpening its focus on sleep health, breathing health, and connected home-based care. The transaction covers the entire MatrixCare business, including Healthcare First, Citus, and its home health and hospice software solutions, which serve more than 15,000 providers, but excludes Resmed's other healthcare software businesses Brightree and MEDIFOX DAN. The deal is expected to close in the first quarter of fiscal 2027, subject to regulatory approvals and customary closing conditions. Resmed stated that MatrixCare will continue operating as part of the company until closing with no disruption to customer service. The divestiture is intended to enhance capital allocation flexibility and allow Resmed to accelerate investments in AI-powered digital health and cloud-connected medical devices.
ResMed will release its fourth quarter results on August 6, 2026, after the New York Stock Exchange close, followed by a webcast. In the third quarter of 2026, net revenue rose 10.8% to $1.43 billion, driven by Sleep and Breathing segment net sales of $1.26 billion and Residential Care Software net sales of $0.17 billion. Net income increased 9.2% to $0.39 billion, with earnings per share of $2.74. For the fourth quarter of 2025, consolidated net revenue grew 10.2% to $1.34 billion, with Sleep and Breathing net sales of $1.18 billion and Residential Care Software net sales of $0.17 billion. ResMed shares closed Wednesday at $201.10, up 3.19%, and are currently trading up 2.12% to $205.37.
ResMed Upgraded to Zacks Rank #2 (Buy) on Rising Earnings Estimates
ResMed has been upgraded to a Zacks Rank #2 (Buy), reflecting an upward trend in earnings estimates. The Zacks Consensus Estimate for the fiscal year ending June 2026 has increased 1.3% over the past three months, with analysts steadily raising their projections. The upgrade places ResMed in the top 20% of Zacks-covered stocks, indicating potential for near-term price appreciation.
ResMed Could Surge 28.2% Based on Wall Street Price Targets
Shares of ResMed have gained 6.6% over the past four weeks to close at $194.88, but Wall Street analysts' short-term price targets suggest a potential upside of 28.2%. The mean estimate of $249.86 is based on 14 price targets ranging from $180.00 to $321.00, with a standard deviation of $42.83. Analysts have also grown more optimistic about the company's earnings prospects, with the Zacks Consensus Estimate for the current year increasing as one estimate moved higher with no negative revisions. ResMed currently holds a Zacks Rank of 2, or Buy, placing it in the top 20% of over 4,000 ranked stocks. While price targets should be treated with skepticism, the direction of price movement implied by the consensus target appears to be a good guide.
ResMed Stock Screens as Undervalued Despite 23.2% Decline
ResMed shares have fallen 23.2% over the past year, yet both Discounted Cash Flow and earnings-based valuation models indicate the stock is trading at a discount. A DCF analysis using trailing free cash flow of about $1.75 billion yields an intrinsic value estimate of roughly $275 per share, approximately 29.2% above the current market price. On an earnings basis, ResMed trades at a price-to-earnings ratio of about 18.5 times, below the medical equipment industry average of 25.6 times and a tailored fair P/E benchmark of 23.2 times. The valuation debate centers on whether the discount represents a buying opportunity or a rational reflection of risks from GLP-1 therapies and competitive pressures on traditional sleep apnea treatment demand.
Patient monitoring stocks beat Q1 revenue estimates by 2.3% but guidance disappoints
The four patient monitoring stocks tracked by this review reported a strong first quarter, with aggregate revenues beating analysts' consensus estimates by 2.3%, though next quarter's revenue guidance came in 0.8% below expectations. Insulet led the group with revenues of $761.7 million, up 33.9% year on year and exceeding estimates by 4.2%, while also posting the fastest revenue growth and biggest analyst estimate beat. iRhythm Technologies reported revenues of $199.4 million, up 25.7% year on year and beating estimates by 2.8%, and delivered the highest full-year guidance raise among its peers. ResMed posted revenues of $1.43 billion, up 10.8% year on year and exceeding estimates by 0.8%, but recorded the weakest performance against analyst estimates and slowest revenue growth in the group. DexCom reported revenues of $1.19 billion, up 15% year on year and topping estimates by 1.4%, though it had the weakest full-year guidance update among its peers.
KeyBanc Adjusts ResMed Price Target to $266, Maintains Overweight Rating
KeyBanc adjusted its price target for ResMed to $266 from $290 while maintaining an Overweight rating on the shares. The firm cited insights from the SLEEP APSS Meeting in Baltimore and further analysis of the obstructive sleep apnea competitive environment, which strengthened its confidence in ongoing patient demand trends. KeyBanc highlighted continued momentum in the OSA and CPAP markets, supported by increasing demand growth from factors such as GLP-1 adoption and consumer wearable technologies. Separately, ResMed completed its acquisition of Noctrix Health, a medical device company focused on wearable therapies for chronic neurological conditions, expanding its sleep health portfolio into Restless Legs Syndrome treatment.