Stockchase Insights
ResMed Inc.
RMD-N
BUY
Jun 25, 2025
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
RMD has been showing positive momentum recently, it is nearing in on its all-time highs, and forward margin expansion is expected to be quite positive. Analyst estimates are trending higher, its margins have been growing, and it generats strong free cash flow, which is partly used for dividends, buybacks, and growing the balance sheet. It is trading at a reasonable valuation of 25X forward earnings, and it has structural tailwinds. We would be comfortable buying the name here today for a long-term hold. Unlock Premium - Try 5i Free
(A Top Pick Sep 25/18, Up 18%) They had a big correction in January and he got stopped out. Pity, because he missed that big run after January. We work on sleep apnea devices, which is a demographic play. A great name. Wishes he still owned it.
They make sleep apnea machines, but now make ventilators during quarter. Last-October they just reported a super quarter that pushed the stock from $180 to $220 in days. It's pulled back to $211 because of positive vaccine news. It'll get a boost from their sleep apnea machines after Covid when people will visit their doctors again.
Gagdets like Goggle Watch have shown people how poorly they sleep. Resmed makes sleep apnea machines, which sees big, growing demand, and they hold 90% of the market.
RMD provides cloud based digital medical devices to assist with sleep and respiratory monitoring and treatment — a steady and reliable business model. It trades at 26x earnings and supports a respectable ROE of 25%. We like that cash reserves are growing, while debt is retired and shares bought back. We recommend setting a stop-loss at $190, looking to achieve $271 — upside potential of 22%. Yield 1.0%
They operate purely domestically, so are safe from tariffs. They report a solid quarter Wednesday and got exempted from tariffs. It could have more room to run.
RMD has been showing positive momentum recently, it is nearing in on its all-time highs, and forward margin expansion is expected to be quite positive. Analyst estimates are trending higher, its margins have been growing, and it generats strong free cash flow, which is partly used for dividends, buybacks, and growing the balance sheet. It is trading at a reasonable valuation of 25X forward earnings, and it has structural tailwinds. We would be comfortable buying the name here today for a long-term hold.
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