ResMed (RMD) Stock Forecast & Price Target

ResMed demonstrated strong financial performance with a gross margin of 62.3%, surpassing consensus estimates by 40 basis points, which reflects the effectiveness of the company’s ongoing efficiency and cost-cutting initiatives. The company achieved an earnings per share (EPS) of $2.81, exceeding prior estimates, bolstered by favorable foreign exchange impacts, while also reporting a non-GAAP operating margin of 36.3%, which improved notably year-over-year and quarter-over-quarter. Moreover, the consistent +16% year-over-year growth in mask sales indicates ResMed's competitive position in an expanding market driven by increasing diagnoses of sleep apnea and a growing emphasis on digital health solutions.

ResMed's management has reduced its fiscal year 2026 growth outlook for its sleep apnea segment from a previously anticipated mid-single-digit to high-single-digit percentage increase, indicating potential concerns about future revenue growth. Additionally, despite an expected increase in earnings per share estimates, operational expenses are projected to remain high, limiting fiscal year 2026 leverage even with healthy revenue growth. The company's international results show weakness, particularly in its mask and device segments, which may be compounded by increased competitive pressures and medium-term disruptions from new therapeutic options like GLP-1 drugs affecting the overall market dynamics.