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

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

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 Price Performance

Shares of RMD stock traded down $21.00 on Friday, reaching $231.83. The company’s stock had a trading volume of 1,616,801 shares, compared to its average volume of 1,293,254. The company has a current ratio of 3.10, a quick ratio of 2.42 and a debt-to-equity ratio of 0.06. ResMed has a 1 year low of $180.26 and a 1 year high of $277.67. The stock’s fifty day simple moving average is $231.83 and its 200-day simple moving average is $225.57. The company has a market capitalization of $32.60 billion, a price-to-earnings ratio of 22.27, a price-to-earnings-growth ratio of 1.53 and a beta of 0.75.

ResMed Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, December 17th. Shareholders of record on Thursday, November 12th will be issued a dividend of $0.66 per share. This represents a $2.64 annualized dividend and a yield of 1.1%. The ex-dividend date is Thursday, November 12th. ResMed’s dividend payout ratio (DPR) is currently 25.31%.

Insider Activity

In related news, CEO Michael Farrell sold 4,991 shares of the stock in a transaction dated Friday, August 7th. The shares were sold at an average price of $205.69, for a total value of $1,026,598.79. Following the sale, the chief executive officer directly owned 466,256 shares of the company’s stock, valued at $95,904,196.64. This represents a 1.06% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through 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 firm’s stock in a transaction that occurred on Friday, October 23rd. The stock was sold at an average price of $255.00, for a total value of $102,000.00. Following the sale, the general counsel directly owned 12,318 shares of the company’s stock, valued at $3,141,090. This represents a 3.15% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 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. 0.58% of the stock is currently owned by insiders.

Analyst Upgrades and Downgrades

Several brokerages have recently weighed in on RMD. Mizuho set a $270.00 price target on ResMed in a research report on Friday. Jefferies Financial Group decreased their price target on shares of ResMed from $240.00 to $225.00 and set a “hold” rating on the stock in a research note on Friday, July 10th. Royal Bank Of Canada upgraded ResMed from a “sector perform” rating to an “outperform” rating and boosted their price objective for the company from $244.00 to $262.00 in a research report on Tuesday, September 15th. UBS Group reaffirmed a “buy” rating and issued a $300.00 target price on shares of ResMed in a research note on Tuesday, July 21st. Finally, Piper Sandler decreased their price objective on shares of ResMed from $233.00 to $225.00 and set a “neutral” rating on the stock in a research report on Friday, August 7th. Seven analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company’s stock. According to data from MarketBeat, the stock has a consensus rating of “Hold” and a consensus target price of $246.31.

ResMed News Roundup

Here are the key news stories impacting ResMed this week:

• Positive Sentiment: ResMed reported adjusted earnings of $2.91 per share, well above the $2.67 analyst consensus and up from $2.55 a year earlier. Revenue increased 5.9% year over year to $1.41 billion, also exceeding estimates of $1.39 billion. ResMed Beats Q1 Earnings and Revenue Estimates
• Positive Sentiment: Sustained demand for sleep devices, productivity improvements and gross-margin expansion supported the quarterly performance, providing evidence that ResMed continues to convert sales growth into stronger profitability. RMD Stock Up on Q1 Earnings and Revenue Beat
• Positive Sentiment: The company declared a quarterly dividend of $0.66 per share, or $2.64 annually, reinforcing its shareholder-return profile. The dividend yield is approximately 1.1%. ResMed Dividend Information
• Neutral Sentiment: KeyCorp raised its price target from $267 to $277 and maintained an Overweight rating, implying substantial potential upside based on the cited share price. However, the target is an analyst opinion rather than a change to company guidance. KeyCorp Raises ResMed Price Target
• Negative Sentiment: RMD’s decline following the earnings release suggests the stronger-than-expected results were already reflected in the stock or that investors wanted faster growth or more upbeat forward commentary. The roughly 6% revenue increase remains healthy but may have appeared less compelling relative to the company’s valuation.

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.