RMD changes
Pick any two versions below to diff them.
- Price
- $238.97 → $238.53(−0.2%)
- Discount category
- Well below intrinsic value → Below intrinsic value
- Next earnings
- Oct 29, 2026 → Jan 29, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices Resmed for the risk that GLP-1 weight loss drugs reduce the number of people who need sleep apnea therapy. Injectable GLP-1 drugs are approved to treat sleep apnea in patients with obesity, and oral versions are in development, as Resmed itself says in its fiscal 2026 annual report. Investors fear that fewer new patients will start CPAP over time. The current results do not show this yet: removed: revenue grew 9% in removed: Q4 added: Q1 fiscal removed: 2026, Americas Sleep and Breathing Health added: 2027, revenue grew removed: 8%, added: 7% on a core constant currency basis, global sleep device revenue grew 9%, mask revenue grew 10%, and the non-GAAP gross margin rose to removed: 62.3%. added: 62.5%. For the gap to close, three things must be true. Device and mask sales must keep growing at a high single digit rate, which shows that GLP-1 drugs bring more patients into diagnosis than they take out. The non-GAAP gross margin must stay near 62% despite costs such as the $42 million Astral field safety notification. Resmed must return more than $1.85 billion to shareholders in fiscal 2027, as removed: planned, added: planned; it returned more than $1.0 billion in Q1, helped by the sale of MatrixCare. The removed: Q1 added: Q2 fiscal 2027 removed: report on October 29, 2026, added: report, expected in late January 2027, gives the removed: first added: next test, and the removed: next reports through 2027 give more. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a fast spread of oral weight loss drugs, which could lower demand for new CPAP therapy over several years.
- Balance sheet
- Cash: removed: $1.5B added: $1.0B Debt: removed: $660M added: $410M Net cash: removed: $809M added: $601M Undrawn credit line: $1.5B, to June 2027 Debt due within 12 months: removed: $260M added: $160M Last debt due: 2029 Resmed has more cash than debt. At removed: June added: September 30, 2026, cash and cash equivalents were removed: $1.47 added: $1.01 billion and debt was removed: $660 added: $410 million: short-term debt of $160 million removed: under its revolving credit agreement, term credit agreement and removed: senior notes. Short-term added: long-term debt of removed: $260 million included $250 removed: million of 3.24% senior notes, which Resmed repaid on July 10, 2026. added: million. The removed: remaining added: long-term debt is the 3.45% senior notes removed: of $250 million at 3.45% are due in July 2029. The removed: $1.5 billion revolving credit facility was not drawn, and it and added: short-term debt is the term removed: loan end added: loan, which ends on June 29, removed: 2027. Operating added: 2027, with the $1.5 billion revolving credit facility. Resmed repaid $250 million of 3.24% senior notes on July 10, 2026. In Q1 fiscal 2027, operating cash flow was removed: $1.81 billion added: $422 million and free cash flow was removed: $1.65 billion in fiscal 2026. added: $374 million. Resmed removed: returned $1.0 billion to shareholders in fiscal 2026, including $700 added: received $451 million added: from the sale of added: MatrixCare, spent $936 million on share repurchases, removed: and it started a added: including the $450 million accelerated share removed: repurchase in September 2026. added: repurchase, and paid $95 million of dividends. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 29, 2026: Q1 fiscal 2027 results: device demand. removed: Pending. added: Passed. Watch: Revenue growth near 8% or more in constant currency, with growth in U.S. devices and masks and a non-GAAP gross margin near 62%, passes; slower device growth or a lower margin fails. added: Outcome: Revenue grew 7% on a core constant currency basis, Americas device and mask revenue grew 8% and 10%, and the non-GAAP gross margin rose to 62.5%. Jan 29, 2027 (estimate): Q2 fiscal 2027 results: growth and guidance. Pending. Watch: Core constant currency revenue growth of 5% or more, a non-GAAP gross margin near 62% and confirmed EPS guidance of $12.00 to $12.25 pass; slower device growth or lower guidance fails. Apr 2027 (estimate): Q3 fiscal 2027 results: new patient starts. Pending. Watch: Continued high single digit growth in device sales passes; flat or falling device sales, which would show the effect of weight loss drugs, fail.
- Recent events
- Oct added: 29, 2026: Resmed reported Q1 fiscal 2027 results. Revenue rose 6% to $1.41 billion, or 7% on a core constant currency basis, which excludes the Noctrix purchase and the MatrixCare sale. Global sleep device revenue rose 9% and mask revenue rose 10%. The non-GAAP gross margin rose to 62.5% from 62.0%, and non-GAAP diluted EPS rose 14% to $2.91. Resmed closed the sale of MatrixCare and returned more than $1.0 billion to shareholders in the quarter. It kept its fiscal 2027 guidance of 5% to 7% core constant currency revenue growth and non-GAAP diluted EPS of $12.00 to $12.25. Oct 1, 2026: Resmed said it will report Q1 fiscal 2027 results after the market close on October 29, 2026. Aug 31, 2026: Resmed entered into a $450 million accelerated share repurchase agreement with Citibank. It plans to fund it with the money from the sale of MatrixCare and cash on hand. Aug 17, 2026: Resmed said that Carol Burt will become Lead Director on November 15, 2026, and that Ron Taylor, Lead Director since 2013, will not stand for reelection at the annual meeting on November 18, 2026. Aug 6, 2026: Resmed reported Q4 fiscal 2026 results. Revenue rose 9% to a record $1.46 billion. GAAP diluted EPS was $2.64 and non-GAAP EPS rose 16% to $2.95. The GAAP gross margin fell to 58.8% because of $42 million of Astral field safety notification costs, while the non-GAAP gross margin rose to 62.3%. Resmed raised its quarterly dividend by 10% to $0.66 and said it plans to return more than $1.85 billion to shareholders in fiscal 2027. Jul 7, 2026: Resmed agreed to sell its MatrixCare software business to Frazier Healthcare Partners. It expected the sale to close in the first quarter of fiscal 2027. Brightree and MEDIFOX DAN are not part of the sale. Jun 1, 2026: Resmed completed the purchase of Noctrix Health, which sells an FDA De Novo classified wearable device that treats restless legs syndrome.