ResMed (NYSE:RMD) Announces Quarterly Earnings Results, Beats Expectations By $0.24 EPS

ResMed (NYSE:RMD) issued its earnings results on Thursday. The medical equipment provider reported $2.91 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.67 by $0.24, FiscalAI reports. ResMed had a net margin of 26.94% and a return on equity of 25.58%. The firm had revenue of $1.41 billion for the quarter, compared to analysts’ expectations of $1.39 billion. During the same quarter last year, the company posted $2.55 earnings per share. ResMed’s revenue was up 5.9% on a year-over-year basis.

Here are the key takeaways from ResMed’s conference call:

• Strong Q1 performance: Revenue rose 7% on a core constant-currency basis to approximately $1.4 billion, while non-GAAP EPS increased 14% to $2.91, supported by demand across sleep devices, masks, and residential-care software.
• Gross margin expanded 50 basis points to 62.5% as procurement, manufacturing, and distribution productivity gains more than offset foreign-exchange and inflationary pressures. Management maintained its expectation for low-double-digit-basis-point gross-margin expansion for fiscal 2027.
• ResMed reiterated fiscal 2027 guidance for 5%-7% core constant-currency revenue growth and $12-$12.25 in non-GAAP EPS, but said the most likely outcome remains the midpoint. Growth could be helped by pricing and marketing initiatives, while France’s fleet refresh will create a back-half headwind and inflation remains a risk.
• New ecosystem initiatives are showing encouraging early traction, including fabric masks that have delivered a reported 6% adherence improvement, SmartComfort’s 4.3% increase in 30-day compliance, and more than 2.1 million inquiries to the Dawn generative-AI sleep coach.
• The company returned more than $1 billion to shareholders in Q1, including $936 million in share repurchases, and expects to return at least $1.85 billion during fiscal 2027. ResMed also highlighted continued investment in U.S. and global manufacturing capacity, though ramp-up costs will weigh on margins in coming quarters.

ResMed Stock Performance

RMD stock opened at $232.98 on Tuesday. The company has a market capitalization of $32.77 billion, a P/E ratio of 22.40, a PEG ratio of 1.53 and a beta of 0.75. The company has a 50-day simple moving average of $231.89 and a 200 day simple moving average of $225.33. ResMed has a fifty-two week low of $180.26 and a fifty-two week high of $277.67. The company has a quick ratio of 2.42, a current ratio of 3.10 and a debt-to-equity ratio of 0.06.

ResMed Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 17th. Investors of record on Thursday, November 12th will be issued a $0.66 dividend. The ex-dividend date of this dividend is Thursday, November 12th. This represents a $2.64 annualized dividend and a yield of 1.1%. ResMed’s dividend payout ratio is presently 24.04%.

Analyst Upgrades and Downgrades

Several research firms have recently commented on RMD. Rothschild & Co Redburn started coverage on ResMed in a report on Wednesday, August 19th. They set a “neutral” rating and a $230.00 target price for the company. Mizuho set a $270.00 price target on ResMed in a report on Friday. KeyCorp boosted their price objective on ResMed from $267.00 to $277.00 and gave the company an “overweight” rating in a research report on Friday. Canaccord Genuity Group downgraded ResMed from a “buy” rating to a “hold” rating in a research note on Monday. Finally, Citigroup upped their price objective on ResMed from $240.00 to $270.00 and gave the stock a “neutral” rating in a research note on Friday. Seven research analysts have rated the stock with a Buy rating and eleven have issued a Hold rating to the company. Based on data from MarketBeat, the company presently has an average rating of “Hold” and an average target price of $253.69.

Key Headlines Impacting ResMed

Here are the key news stories impacting ResMed this week:

• Positive Sentiment: UBS sees sustainable earnings growth. UBS said ResMed is likely to maintain earnings growth, reinforcing the view that the company’s operating momentum and profitability can persist. ResMed Likely Able to Sustain Earnings Growth, UBS Says
• Positive Sentiment: Analysts raised price targets. Separate reports said ResMed price targets were increased to $277, $270 and $250, while consensus targets for certain international listings also moved higher. The revisions indicate improving expectations for earnings and valuation, although the targets apply to different securities and markets. ResMed Price Target Raised to $277.00 ResMed Price Target Raised to $270.00 ResMed Price Target Raised to $250.00
• Positive Sentiment: Revenue growth and GLP-1 trends are favorable. A review of ResMed’s results highlighted 7% core constant-currency revenue growth. It also noted that patients taking GLP-1 drugs are 11% more likely to start CPAP therapy, potentially expanding the addressable market as obesity treatments become more widely used. ResMed: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Product innovation and supply-chain execution remain supports. A quarterly deep dive pointed to new products and effective supply-chain management as drivers of results despite an evolving healthcare environment. RMD Q3 Deep Dive: Product Innovation and Supply Chain Execution Drive Results Amid Evolving Landscape
• Negative Sentiment: Canaccord downgraded the stock. Canaccord Genuity lowered ResMed from buy to hold, signaling that the recent gains may already reflect much of the company’s expected growth and creating a valuation-related headwind. Canaccord Genuity Group ResMed Rating

Insider Buying and Selling at ResMed

In other ResMed news, CEO Michael Farrell sold 4,991 shares of the firm’s stock in a transaction dated Friday, August 7th. The shares were sold at an average price of $205.69, for a total transaction of $1,026,598.79. Following the transaction, the chief executive officer owned 466,256 shares of the company’s stock, valued at approximately $95,904,196.64. This trade represents a 1.06% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, General Counsel Michael Rider sold 400 shares of the business’s stock in a transaction dated Friday, October 23rd. The stock was sold at an average price of $255.00, for a total transaction of $102,000.00. Following the sale, the general counsel owned 12,318 shares in the company, valued at $3,141,090. This trade represents a 3.15% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 24,343 shares of company stock valued at $5,396,098. Company insiders own 0.58% of the company’s stock.

About ResMed

ResMed Inc is a medical equipment and software company that develops solutions for sleep-disordered breathing, respiratory conditions and other chronic diseases. The company is best known for its positive airway pressure (PAP) devices used to treat obstructive sleep apnea, along with masks, accessories and related patient support services.

ResMed also provides cloud-connected health technology, including remote-monitoring platforms and software used by healthcare providers, medical equipment suppliers and care organizations.