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Fund Manager Summary on Resmed CDI (ASX:RMD)
In February 2026, Pendal Group commented that Resmed CDI (ASX:RMD) continued to deliver solid results in 2Q with 9% constant-currency revenue growth, expanding gross margins, a modest upward guidance adjustment and ongoing share buybacks as the company gains US market share while its addressable market is broadened by GLP-1 adoption and wearables. Across fund manager commentary the consensus view is that ResMed is a market-leading, cash-generative medical device and connected-health platform benefiting from structural tailwinds—large-scale cloud-connected device data, new at‑home diagnostics (NightOwl FDA approval) and targeted acquisitions (VirtuOx) that strengthen diagnosis-to-treatment pathways—while operational execution (manufacturing and distribution capacity expansion in Calabasas and Indianapolis, margin recovery from supply-chain improvements, and continued R&D investment around 6–7% of revenue) is driving margin expansion and recurring revenue growth in devices, masks and software; key opportunities cited include accelerating diagnosis conversion, leveraging data-driven remote monitoring to increase lifetime revenue per patient and ongoing product innovation, while principal risks and monitoring points remain the evolving GLP-1 narrative (potential to alter long‑term demand but to date coinciding with increased patient flows), competitive dynamics including competitor recalls and competitive bidding, regulatory and trade risks (Section 232 scrutiny), and the requirement to sustain execution on manufacturing scale, distribution velocity and software monetisation to convert these structural advantages into durable earnings upgrades and valuation re-rating.
Commentary From The Managers
There are 58 insights from 22 fund managers regarding their investment in Resmed CDI (ASX:RMD) available on Thesis Tracker.
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Commentary From The Managers
Pendal Group
2 Feb 2026
$37.06
Summary
- Pendal Group believes RMD is delivering durable, share-driven growth and continues to hold because of strong US share gains, an expanding addressable market (GLP-1 and wearables), margin expansion with upgraded guidance, consensus-beating results and a net-cash balance sheet with ongoing buybacks.
- Revenue growth: 2Q top line +9% (constant currency), demonstrating continued demand momentum.
- US share gains: continued market share take-up in the US, further entrenching an already dominant position.
- Addressable market expansion: uptake of GLP-1 treatments and increased use of wearables are enlarging long-term market opportunity.
- Margins & guidance: gross margin continued to expand; full-year guidance raised by ~50 basis points at the midpoint.
- Results vs consensus: beat consensus by approximately 2–3% across the profit and loss.
- Balance sheet & capital returns: net cash position maintained and incremental share buybacks each quarter supporting shareholder value.
Totus Capital
31 Jan 2026
$37.06
Summary
- Totus Capital believes ResMed remains a high-quality growth business and continues to hold because the latest result delivered revenue +11%, EPS +14.5% and gross margin expansion, repeatedly disproving the GLP‑1 disruption narrative while the stock still trades at a low ~20x PE.
- Operating momentum: revenue and EPS growth plus margin expansion point to durable demand, pricing power and operational leverage.
- Valuation disconnect: market fears around GLP‑1 impact have compressed the multiple to the low 20s, creating a favorable asymmetry relative to delivered growth.
- Earnings quality & visibility: recurring revenue streams, a large installed base and consistent execution provide visibility into ongoing growth.
- Bull/bear evidence: each quarterly result continues to challenge the bear narrative by showing underlying demand and margin resilience.
- Key risks monitored: potential downstream effects from widespread GLP‑1 adoption, reimbursement or regulatory shifts, and competitive dynamics.
- Positioning: maintain exposure while monitoring subsequent results for sustained top-line and margin trends before reassessing.
Pengana Capital Group
31 Dec 2025
$35.94
Summary
- Pengana Capital Group believes and continues to hold because ResMed's sustained share gains, recurring consumables and expanding software-enabled ecosystem underpin durable earnings and cashflows that outweigh market concern about GLP‑1 weight-loss drugs.
- Strong operational performance: continued delivery of robust results and margin resilience demonstrates consistent execution across products, channels and geographies.
- Market leadership: entrenched position in sleep-disordered breathing with a large installed base creates high barriers to entry and long product lifecycles.
- Recurring revenue model: consumables and replacement parts drive predictable, high-margin cashflows and support earnings visibility.
- Software and connected devices: digital offerings increase customer stickiness, enable remote-care monetisation and create upsell/cross-sell opportunities.
- GLP‑1s present opportunities not threats: while weight-loss drugs may reduce demand for a subset of patients, they also broaden disease awareness and care pathways and do not eliminate clinical need for many existing patients.
- Risk offset: anticipated robust future earnings and cashflows are expected to more than compensate for market overreaction to GLP‑1 headlines and near-term demand shifts.
- Conviction drivers: durable recurring cashflows, deep competitive moats, ongoing product innovation and predictable upgrade cycles form the basis for continued ownership.
Totus Capital
31 Dec 2025
$35.94
Summary
- Totus Capital highlights that there was no material new news for Resmed despite a share price decline of -8.6% for the month.
- The year-to-date return for Resmed stands at -2.3%.
- Resmed remains affected by the GLPI loser trade in global markets, yet there has been no significant impact on its financials.
- Currently trading at just over 20x PE, Resmed is expected to achieve high single-digit to low double-digit EPS growth.
- Totus Capital views this valuation as attractive for a standards-based medical device company with a leading market share.
- In response to the recent weakness, Totus Capital has increased their position in Resmed to just over 8% of the portfolio.
ECP Asset Management
6 Nov 2025
$37.70
Summary
- ResMed has the most near-term upside in our view.
- There has been a broad sell-off across med-tech, impacting quality names.
- The company’s latest print showed revenue growth of around 9% year-on-year.
- Another step-up in gross margin, supported by better manufacturing efficiency and lower costs.
- Cash generation remains healthy.
- Margin expansion suggests more operating leverage if volumes keep growing.
- Key focus areas include operating leverage, margin rebuild, and widening the sleep funnel.
- ResMed is emphasizing diagnosis-to-treatment conversion and adherence tools.
- These tools help more patients complete their treatment journey.
- If execution continues, earnings support and multiple relief can follow.
Pendal Group
3 Nov 2025
$37.83
Summary
- Pendal Group continues to hold its position in ResMed (RMD) following a solid quarterly performance.
- Revenue grew 8% in constant currency, aligning with market expectations.
- US Flow Generator machine growth was strong at +8%.
- Growth in the rest of the world was +6% in constant currency, with software service growth at +5%, both forecasted to accelerate this quarter.
- Gross margin exceeded expectations, leading to EBIT and NPAT being 1% ahead of market predictions.
- Bottom-line growth is in the mid-teens, with particularly strong cash flow reported.
- The balance sheet remains robust with net cash, and the company is actively buying back stock.
- ResMed is increasingly shifting some manufacturing to America.
- Upcoming competitive bidding and risks around the Section 232 investigation are noted, though ResMed is typically insulated from tariffs due to the Nairobi protocol.
Infinity Asset Management
31 Oct 2025
$39.53
Summary
- ResMed; Infinity Asset Management continues to hold due to positive long-term prospects.
- Increased position back up to target following recent share price weakness.
- Market fundamentals remain favorable, supporting growth potential.
- Innovative product pipeline expected to drive future revenues.
- Continued strong demand in sleep apnea and respiratory markets.
- Strategic investments to enhance market share and operational efficiency.
- Management's commitment to shareholder value through dividends and buybacks.
Selector Funds Management
31 Oct 2025
$39.53
Summary
- Selector Funds Management notes Resmed's first quarter FY26 reported revenue of US$1.34b, reflecting a 9% increase year-on-year.
- Underlying net profit rose by 15% to US$374.9m, indicating strong operational performance.
- Revenue growth was driven by global device sales (+9% to US$680m), Masks & Other (+11% to US$489m), and Residential Care Software (+6% to US$166m).
- Gross margins improved by 290 basis points to 61.5%, thanks to efficiencies in manufacturing and logistics.
- Resmed launched two new mask variants: AirTouch F30i Comfort and AirTouch F30i Clear, expanding its innovative product lineup.
- The company plans to invest in a new distribution centre in Indianapolis to enhance delivery speed and distribution resilience.
- By 2027, Resmed aims for 90% of customers to receive products within 2 business days.
- In Residential Care Software, Resmed intends to shift focus towards high growth and high margin areas while reducing exposure in the Skilled Nursing division.
- The segment is expected to transition from mid-single digit revenue growth to high single digit growth and double digit operating profit (EBIT) in the next 12 months.
- Resmed has a market capitalisation of US$36b and net cash of US$715m, continuing its US$150m quarterly share buyback.
ELM Responsible Investments
31 Oct 2025
$39.53
Summary
- ELM Responsible Investments notes a strong start to fiscal year 2026 for ResMed, with first-quarter revenue growth of 9% year-over-year, reaching $1.3 billion.
- The company achieved impressive margin expansion, with non-GAAP gross margin increasing by 280 basis points to 61.5%.
- This performance resulted in a 16% growth in non-GAAP earnings per share.
- The growth was driven by increased demand for ResMed's portfolio of sleep devices, masks, and accessories.
- In the US, Canada, and Latin America (excluding Residential Care Software), revenue grew by 10%.
- ResMed announced a landmark study in The Lancet Respiratory Medicine, projecting approximately 77 million US adults with obstructive sleep apnoea by 2050, indicating a 35% relative increase from 2020.
- This underscores the need for earlier diagnosis and scalable care pathways.
Auscap Asset Management
24 Sept 2025
$41.65
Summary
- Auscap Asset Management continues to hold ResMed (RMD) in their portfolio, representing about 3.5% of the fund.
- The share price has seen a slight increase over the month.
- Last year, during the August reporting season, ResMed faced a significant decline in share price due to concerns about GLP-1 drugs like Ozempic impacting sleep apnoea product demand.
- This initial market reaction resulted in share prices dropping by 20% to 30% in a single day.
- Despite ongoing demand for GLP-1 drugs, evidence suggests that their impact on sleep apnoea cases is not as significant as initially feared.
- Anecdotal discussions indicate no reduction in the use of ResMed products among those diagnosed with sleep apnoea.
- The combination of disputed views on GLP-1's impact and a compelling valuation opportunity has created a favorable investment environment for Auscap Asset Management.
SG Hiscock & Company
31 Aug 2025
$41.86
Summary
- ResMed posted a strong 4Q and FY25 result.
- Growth driven by strong gross margin expansion.
- Benefits of scale and easing Covid supply chain issues.
- SG Hiscock & Company sees ResMed as well positioned for continued growth.
- Market leader in obstructive sleep apnoea, gaining market share.
- Phillips product recall issues benefiting ResMed.
- Total addressable market expanding due to increased awareness of obesity and CPAP therapy.
- Growth in GLP-1’s contributing to market expansion.
Alphinity Investment Management
14 Aug 2025
$43.94
Summary
- Alphinity Investment Management identifies ResMed as a global leader in sleep apnoea devices.
- There are multiple idiosyncratic catalysts supporting a positive outlook for the company.
- ResMed's earnings momentum is fueled by strong product demand and margin expansion.
- The company is effectively leveraging increased scale and successful new product launches.
- ResMed continues to invest significantly in research and development and ecosystem development.
- This investment strategy aims to extend their competitive moat.
- Such initiatives are expected to sustain the earnings upgrade cycle over the long term.
Clime Investment Management
31 July 2025
$42.45
Summary
- Clime Investment Management has observed strong share price performance for Resmed (RMD.ASX) in recent months.
- In response, they have decided to moderate their position in Resmed.
- This decision aims to realign the position size within their Australian shares portfolios.
- Clime Investment Management continues to hold a positive outlook on Resmed despite the adjustments.
Yarra Capital Management
31 July 2025
$42.45
Summary
- Yarra Capital Management continues to hold ResMed (RMD) due to its position as the global leader in sleep apnoea diagnosis and treatment.
- RMD has outperformed recently as expectations rise for strong operating performance ahead of the upcoming results in August.
- The stock's performance may have been positively influenced by Novo Nordisk's reduced full-year guidance, enhancing the perception of ResMed's growth prospects.
- ResMed is actively investing in raising awareness, capturing new customers, and delivering innovative products.
- The company is experiencing an attractive high single-digit group sales trajectory.
- Yarra believes that ResMed is well positioned to achieve operating earnings leverage, leading to double-digit earnings growth.
- There is a view that the current stock earnings multiple does not adequately reflect the potential for attractive earnings growth.
SG Hiscock & Company
31 July 2025
$42.45
Summary
- SG Hiscock & Company observes a 7.9% increase in Resmed's share price, influenced by fluctuating news on GLP-1 obesity drugs.
- There is a growing belief that GLP-1s are leading to more individuals entering the sleep channel, thereby expanding the addressable CPAP market.
- Resmed has enhanced its direct-to-consumer marketing to improve visibility and awareness regarding obesity and CPAP therapy.
- Recent interactions with clinicians indicate that Resmed is well positioned to leverage growth opportunities.
- Resmed is recognized as the market leader in its sector, demonstrating growth that exceeds the market average.
- The company maintains a sustainable competitive advantage through its distribution and product offerings.
Blackwattle Investment Partners
30 June 2025
$39.35
Summary
- Blackwattle Investment Partners continues to hold a positive outlook on Resmed (RMD) as concerns regarding GLP-1 weight-loss drugs ease.
- Despite GLP-1 usage affecting up to 1 in 8 U.S. adults, Resmed has reported 5–12% device growth in recent quarters.
- Resmed maintains strong market leadership and an innovative strategy to counter the impact of GLP drugs.
- With 29 million cloud-connected devices and 32 million patients on AirView, Resmed's market presence is significant.
- The company boasts 160 million accounts in its Residential Care Software network, highlighting its extensive reach.
- Recent product launches, such as the AirSense 11 AutoSet CPAP and the Dawn AI-enabled sleep concierge, mark a notable shift in innovation.
- These advancements are expected to enhance competitive edge and drive margin expansion as older models are phased out.
Pengana Capital Group
30 June 2025
$39.35
Summary
- ResMed remains an extremely valuable position for the Fund.
- Dominant global market leader in medical devices for sleep apnoea, following competitor mismanagement and FDA action.
- Initial gains offset by COVID-induced supply chain issues, creating margin and manufacturing constraints.
- As supply chain issues eased, ResMed scaled up production, driving profitability and volumes higher.
- Uncertainty arose from the rise of GLP1 weight loss drugs, which could potentially replace sleep apnoea devices.
- Increased awareness from large-scale marketing by global pharmaceutical companies has driven patient volume to GPs and sleep clinics.
- The fundamental valuation for this strong and defensive cash-producing business remains attractive.
- Customers make recurring purchases of flow generators and masks, with flow generators replaced every 5 years.
- The business is globally diversified and operates in a non-economically sensitive industry.
Alliance Bernstein
30 June 2025
$39.35
Summary
- Alliance Bernstein notes a positive industry outlook for ResMed, particularly in sleep apnea device sales.
- The company’s share price experienced an increase prior to the release of its full-year results.
- ResMed's earnings exceeded expectations, confirming the positive momentum.
- Strong sales and improved gross margin expansion were key drivers of the earnings beat.
- Alliance Bernstein continues to hold a favorable view on ResMed based on these developments.
Cordis Asset Management
31 May 2025
$37.70
Summary
- Cordis Asset Management is updating their investment thesis on ResMed (ASX:RMD).
- The medical technology sector is experiencing ongoing M&A activity and key regulatory approvals.
- ResMed announced the acquisition of VirtuOx, enhancing its diagnostic capabilities in sleep, respiratory, and cardiac testing.
- This acquisition reduces bottleneck pressures in the diagnoses pipeline.
- It supports ResMed’s broader connected health strategy.
- ResMed's extensive data of 20 billion nights of sleep and breathing health provides scalable, data-driven pathways.
- The focus is on improving patient outcomes and reducing costs.
- This strategy strengthens long-term recurring revenue through remote monitoring and cloud-connected devices.
Selector Funds Management
30 Apr 2025
$36.68
Summary
- Selector Funds Management highlights Resmed's revenue growth of 9% to US$1.3b on a constant currency basis for Q3 2025.
- Underlying operating income (EBIT) increased by 14% to US$426m.
- Gross profit margins improved by 140 basis points to 59.3% due to efficiencies in manufacturing and logistics.
- The growth was driven by increased demand for sleep devices and masks, alongside strong performance in the residential care software sector.
- Management sees further opportunities for incremental gross profit margin improvement through continuous improvement initiatives.
- Resmed's NightOwl at-home sleep apnoea test is now available in the U.S., enhancing diagnosis efficiency.
- A new sleep lab testing and titration platform has been introduced, complementing NightOwl and AirView.
- Resmed aims to improve 500 million lives by 2030, having already impacted nearly 151 million lives in the past year.
- The company has a market capitalisation of US$34.5b and net cash of US$260m.
- Resmed has increased its quarterly dividend to 53 cents per share and raised its share buyback program to US$100m.
ELM Responsible Investments
30 Apr 2025
$36.68
Summary
- ELM Responsible Investments continues to hold ResMed due to its strong market position as a global medical device company.
- ResMed specializes in cloud-connected devices for treating sleep apnea, COPD, and other respiratory conditions.
- The company’s products aim to improve patient outcomes and reduce healthcare costs by facilitating care outside hospital settings.
- Following the release of its first-quarter 2025 earnings, ResMed shares rose approximately 4%, reflecting positive market sentiment.
- ResMed reported $1.2 billion in revenue, marking an 11% year-over-year increase driven by high demand for sleep apnea devices and masks.
- CEO Mick Farrell noted the company’s operational excellence contributed to year-over-year margin expansion.
- Operating profit increased by 34%, showcasing strong execution across all business areas.
Sterling Managed Investments
30 Apr 2025
$36.68
Summary
- Sterling Managed Investments continues to hold and add to their position in Resmed (RMD) following a strong quarterly earnings result.
- Resmed is recognized as the global market leader in medical devices for diagnosing and treating chronic respiratory conditions, particularly obstructive sleep apnea.
- The company possesses key investment attributes: a leading competitive position, sound strategy, supportive operating environment, shareholder-friendly management, and a strong balance sheet.
- On valuation, RMD trades at 21x P/E, significantly lower than peers Cochlear (COH) at 40x and Fisher & Paykel Healthcare (FPH) at 50x P/E.
Swell Asset Management
30 Apr 2025
$36.68
Summary
- Swell Asset Management notes a 8% increase in third quarter revenue to $1.3 billion.
- Gross margin rose by 140 bps to 59.3%.
- Income from operations increased by 14%.
- Operating cash flow reached $579 million.
- Diluted earnings per share rose by 22% to $2.48.
- During the quarter, Resmed paid $78 million in dividends and repurchased 314,000 shares for approximately $75 million.
- R&D expenses are projected to account for 6-7% of revenue through 2025, driving innovation and long-term success.
- A new manufacturing and research facility in Calabasas, California, will double the size of its manufacturing footprint in the US.
- CEO Mick Farrell highlighted increased patient flows through wearable technologies and targeted demand generation.
- Resmed's NightOwl received FDA approval for home diagnosis of obstructive sleep apnoea.
- The disposable device simplifies the diagnosis process, presenting a significant opportunity for Resmed.
- CMO Carlos Nunez emphasized that NightOwl is a meaningful step forward in Resmed’s mission to deliver life-changing health technology.
Endeavor Asset Management
28 Feb 2025
$37.12
Summary
- Endeavor Asset Management sold their investment in ResMed (RMD).
- In 2023, ResMed shares faced a sharp sell-off due to exaggerated market concerns regarding weight loss drugs.
- Endeavor re-entered ResMed in November 2023 at $24.30 per share.
- They added to their position around $28 per share.
- As market fears eased, ResMed shares appreciated steadily over the following 12 months.
- Endeavor exited their position over the past two months at an average price of $39.50 per share.
Selector Funds Management
31 Jan 2025
$40.18
Summary
- Selector Funds Management notes ResMed's strong 2Q25 results with revenue up 10% to US$1.3b.
- Underlying net profit after tax increased by 29% to US$358m.
- Growth was driven across all segments: global device sales rose 10% to US$669m.
- Sales of Masks and Other Accessories increased by 11% to US$456m.
- Residential Care Software sales grew 8% to US$157m.
- Underlying gross profit margins improved by 280 basis points to 59.2% due to efficiencies and lower component costs.
- Operating profit (EBIT) margins expanded by 230 basis points to 34.0%.
- Underlying net profit margins increased by 410 basis points to 27.9%.
- ResMed launched the AirTouch N30i mask, a fabric frame innovation described as a "game changer" by CEO Mick Farrell.
- ResMed is positioned to capitalize on opportunities in connected digital health and consumer wearables.
- The company aims to improve 500 million lives by 2030, having already helped over 147 million in the past year.
- ResMed has a market capitalization of US$35b and net debt of US$151m.
Clime Investment Management
31 Jan 2025
$40.18
Summary
- RMD rallied over the month due to ongoing positive industry feedback regarding strong demand for Resmed's CPAP machines.
- This positive sentiment was confirmed by RMD's 2Q financial results, showing sales growth of 10% and earnings growth of 19%.
- Clime Investment Management reduced their position in RMD acknowledging the substantial share price recovery over the last 12 months.
- Despite the reduction, Clime continues to maintain an overweight position on RMD.
- The investment thesis is based on the belief that RMD is well-positioned for future growth in revenue and earnings.
- This outlook is supported by a large and growing addressable market and RMD's commanding market position.
Pengana Capital Group
31 Jan 2025
$40.18
Summary
- Pengana Capital Group notes strong performance of Resmed as share price increased ahead of quarterly results.
- Investors are recognizing Resmed’s dominant position in sleep apnoea medical devices.
- The Fund has trimmed its holdings in response to this price strength.
- While remaining optimistic about the company’s future prospects, the Fund decided it was prudent to take some profits after previous investments at lower levels.
Totus Capital
23 Jan 2025
$39.35
Summary
- Market Leadership: Resmed is recognized for its strong position in the industry.
- High Margins and Returns: The company demonstrates high margins with impressive returns on capital.
- Strong Balance Sheet: Resmed maintains a robust financial position.
- Good Governance: The company exhibits strong governance practices.
- De-rating Concerns: Ongoing fears about the impact of GLP-1 weight loss drugs have led to a significant de-rating of Resmed's valuation multiple.
- Position Initiation: Totus Capital initiated a position during the selloff in late 2023, taking advantage of the market's reaction to GLP-1 drug adoption.
- Earnings Growth: Despite the de-rating, Resmed has experienced accelerating earnings growth over the past year.
- Increased Position: Totus Capital increased its investment as the business's improving momentum became evident.
- Combined Treatment Benefits: Data shows increased adherence to treatment when combining Resmed's products with GLP-1 usage.
- Wearable Device Integration: The introduction of sleep apnea health warnings in devices from Apple and Samsung supports Resmed's growth potential.
- Tailwinds for Growth: Resmed is well-positioned to increase treatment penetration among the 1 billion people suffering from obstructive sleep apnea worldwide.
Pengana Capital Group
31 Dec 2024
$36.77
Summary
- Pengana Capital Group notes the significant impact of the growing popularity of GLP-1 drugs on the Resmed share price over the past 18 months.
- The initial market reaction suggested that the efficiency of these drugs would eliminate obesity, sleep apnoea, and the need for related medical devices.
- Short sellers targeted Resmed and other medical device companies linked to obesity and sleep apnoea.
- In contrast, Pengana Capital Group posits that large pharmaceutical companies will increase advertising, leading to greater consumer interest.
- This consumer interest is expected to drive patients to consult physicians, who may prescribe both sleep apnoea devices and weight loss drugs.
- Through channel checks, Pengana Capital Group validated their hypothesis and increased their investment in Resmed by doubling their holdings at attractive prices.
- As a result, Resmed has seen a recovery of over 70% from its low in October 2023.
Swell Asset Management
31 Dec 2024
$36.77
Summary
- Swell Asset Management continues to hold its position in ResMed CDI due to recent strategic developments.
- CEO Mick Farrell and the executive team launched the ResMed 2030 strategy in Singapore, aiming to provide respiratory relief to 500 million people with obstructive breathing disorders.
- The ResMed Kontor Head Strap for Apple’s Vision Pro was released, designed to enhance comfort by distributing the device's weight.
- The head strap is available for US$119.95 on Apple’s website.
- Eli Lilly received FDA approval for its weight loss drug Zepbound as a treatment for sleep apnoea, showing promising results in clinical trials.
- Trials indicated that patients on Zepbound experienced significantly fewer breathing disruptions than those on a placebo.
- The drug was also tested alongside CPAP devices, resulting in significant improvements.
- Both CEO Mick Farrell and CMO Carlos Nunez have praised the rise of weight loss drugs for raising awareness of sleep apnoea, likely encouraging more individuals to seek treatment.
Blackwattle Investment Partners
31 Oct 2024
$36.92
Summary
- ResMed (RMD) remains the fund’s largest active position.
- Strong sales and earnings growth are reported, countering market concerns about GLP drugs.
- New patient activations are driving double-digit revenue growth.
- The "razor and blade" model is supported by re-supply as well as new patients.
- AirSense 11 platform is progressing well, with expected improvement in gross margin as production scales.
- Launch of the new mask, N30i, features a proprietary fabric-wrapped system for enhanced comfort.
- RMD’s price-to-earnings multiple is at a 10% discount to its ten-year average, slightly above CBA.
Selector Funds Management
31 Oct 2024
$36.92
Summary
- Selector Funds Management acknowledges ResMed's strong performance in 1Q25, with a revenue increase of 11% to US$1.2 billion.
- Net profit after tax surged 42% to US$311 million, indicating robust financial health.
- Growth was broad-based, with global device sales rising 11% to US$626 million and masks and accessories also up 11% to US$442 million.
- Residential Care Software revenue increased by 13% to US$156 million, showcasing diversification in offerings.
- Operating profits (EBIT) grew 34% to US$387 million, attributed to effective cost management and efficiency initiatives.
- Gross profit margins improved to 59.2%, reflecting a 320-basis point increase compared to the prior year.
- Net profit margins expanded from 19.9% to 25.4% over the last 12 months, demonstrating enhanced profitability.
- Despite rising freight costs, management targets a FY25 gross profit margin of 59%-60%.
- ResMed launched the AirTouch N30i, a new mask innovation described as a "game changer" by CEO Mick Farrell.
- The mask's fabric technology has been in development for over a decade, indicating a commitment to innovation.
- ResMed remains a leader in the Sleep Apnea market, benefiting from increased patient awareness driven by consumer wearables.
- The company has a market capitalization of US$35.9 billion, reflecting its significant position in the industry.
Clime Investment Management
31 Oct 2024
$36.92
Summary
- RMD was a positive contributor to performance over the month.
- The stock's rise was driven by another strong quarterly result.
- Double digit sales growth across all divisions and geographies.
- Ongoing expansion in margin from product innovation and cost control.
- Weaker AUD versus USD also aided RMD's performance.
- Despite a significant rise in share price over the last 12 months, RMD still represents good value.
- Strong earnings growth continues to support the investment thesis.
Selector Funds Management
30 Sept 2024
$34.97
Summary
- ResMed is a global leader in sleep health and respiratory technology, employing 10,000 people in over 140 countries.
- Founded in 1989, ResMed is the dominant provider of CPAP devices for sleep apnea.
- In the past year, ResMed has improved over 178 million lives through digital health products.
- Recent financial results show 11% revenue growth to US$4.7b and 21% increase in EBIT to US$1.5b.
- Gross profit margins expanded 120 basis points to 57.7%, with expectations for further improvement.
- Sleep apnea affects over one billion people globally, presenting a significant market growth opportunity.
- ResMed is investing in consumer awareness initiatives and improving diagnosis pathways.
- Pharmaceutical innovations like GLP-1 weight loss drugs are increasing patient compliance with CPAP therapy.
- Technological innovations in sleep tracking wearables are helping to detect sleep apnea.
- ResMed is well positioned with leading CPAP devices and 26 million connected devices globally.
- At the Investor Day, management highlighted its leadership position in sleep apnea and a five-year strategy to improve 500 million lives by 2030.
- The strategy includes high single-digit revenue growth and faster profit growth.
- Focus on product innovation and improving patient pathways in sleep apnea and adjacent categories.
- ResMed’s digital ecosystem integration is crucial for achieving its 2030 goals.
- Current market capitalisation stands at US$36b.
Equity Trustees Asset Management
30 Sept 2024
$34.97
Summary
- Equity Trustees Asset Management notes that RMD has shown resilience in recovering from the impact of GLP1 treatments on OSA demand.
- Research indicates the best treatments combine GLP and CPAP, suggesting a prolonged impact on RMD.
- RMD demonstrated strong trading momentum into FY25 with solid sales growth.
- The company is maintaining and winning market share across all key markets.
- Gross margins have exceeded expectations.
- Strong operating leverage allows RMD to enhance profitability.
- The recent strategy day reiterated RMD's robust medium-term growth outlook.
- This outlook is expected to generate strong sustainable cash flow for reinvestment and capital management.
ECP Asset Management
31 Aug 2024
$36.01
Summary
- ECP Asset Management notes that ResMed Inc (RMD) has outperformed after its 4Q24 results in July.
- Management emphasized the increased awareness surrounding GLP-1 drugs and their impact on OSA.
- The growing patient base related to OSA is a key factor in the investment thesis.
- ResMed is committed to margin improvements to enhance profitability.
- The company aims to reinforce its already leading market share in the industry.
ELM Responsible Investments
31 Aug 2024
$36.01
Summary
- ELM Responsible Investments recognizes ResMed as a global leader in medical devices and cloud-based solutions for respiratory conditions.
- For FY 2024, ResMed reported a 11% revenue increase to $4.7 billion and a 17% rise in net income.
- The fourth quarter showcased 9% revenue growth to $1.2 billion and a remarkable 38% increase in operating profit.
- ResMed's market leadership is attributed to its innovative approach in treating sleep and breathing disorders.
- With operations in over 140 countries, ResMed serves millions of patients, enhancing care through cloud-connected devices.
- Investment in R&D has led to advancements like the AirView monitoring system, improving patient adherence rates up to 87%.
- Recent data presented by CEO Mick Farrell indicates potential benefits of GLP-1 weight loss drugs for the sleep apnoea market.
- Analysis of 529,000 patients shows a 10% increase in those starting positive airway pressure therapy linked to GLP-1 prescriptions.
- This unexpected synergy could provide new growth opportunities for ResMed.
Blackwattle Investment Partners
31 Aug 2024
$36.01
Summary
- Blackwattle Investment Partners continues to hold a positive view on Resmed (RMD), reflecting their recent strong performance.
- Resmed reported a remarkable +10% revenue growth and a +38% increase in income for the 12 months to 2024, alleviating market concerns.
- Notable performance included Resmed’s stock rising +11% following Q4 2024 results.
- Mask growth was strong at +15%, attributed to software-driven resupply initiatives and the successful launch of the AirFit F40.
- There has been an acceleration in patient inflows to the sleep channel, as individuals seeking obesity treatments (GLP-1 drugs) are also diagnosed with diabetes and sleep apnea.
- CEO Michael Farrell noted a positive correlation between GLP-1 prescriptions and adherence to positive airway pressure therapy, with a 10.7 percentage points higher propensity for patients prescribed GLP-1 medications to start PAP therapy.
Clime Investment Management
31 Aug 2024
$36.01
Summary
- RMD's strong performance in August was attributed to earnings upgrades from the rollout of the new AirSense 11.
- There is an absence of immediate competition from Philips in the US market.
- The narrative surrounding GLP-1 drugs has improved, positively impacting perceptions of sleep apnea treatments.
- Clime Investment Management retains conviction in RMD's market position.
- The company is expected to continue delivering high-quality medical devices for those suffering from respiratory conditions.
Endeavor Asset Management
31 Aug 2024
$36.01
Summary
- ResMed Inc (RMD) experienced a 10% increase in share price after reporting an expanded gross margin of 3.3% YoY.
- Gross margin improved to 59.1% due to cost optimisation, scale benefits, and an advantageous product sales mix.
- Management aims for gross margin to reach approximately 60% in FY25.
- Endeavor Asset Management continues to hold due to ResMed's ambition to evolve into a digital health business, leveraging data analytics and trends in consumer wearables.
- Expectations for earnings multiples to expand as concerns around GLP-1 anti-obesity drugs diminish.
- Current FY25 P/E ratio is 25x, with a target of ~30x, aligning with historical averages over the last 5 years.
ECP Asset Management
31 July 2024
$32.49
Summary
- ECP Asset Management continues to hold ResMed Inc (RMD) due to its recent performance.
- ResMed outperformed expectations despite a lack of significant news flow.
- The company reported a strong 4Q result in early July, indicating robust financial health.
- The gross profit margin recovery story is gaining momentum, reflecting operational improvements.
- In an uncertain macro-economic environment, high-quality medical device companies like ResMed are positioned to perform well.
Blackwattle Investment Partners
31 July 2024
$32.49
Summary
- Blackwattle Investment Partners maintains an overweight position in ResMed (RMD.AX), contributing positively to performance in July.
- This marks a reversal from the previous month where ResMed was a significant detractor due to concerns regarding GLP-1 drugs.
- Current evidence suggests that GLP-1 drugs are not a mortal threat to ResMed's sleep apnoea devices.
- Key countervailing factors include benefits from combined weight loss treatment and increased sleep apnoea testing.
- The side effects and temporary nature of GLP-1 drugs do not pose a significant risk.
- ResMed’s FY24 results showed continued revenue growth of 11% and improved gross margins.
- This performance supports Blackwattle Investment Partners' thesis regarding ResMed’s resilience against existential threats.
Blackwattle Investment Partners
30 June 2024
$28.60
Summary
- ResMed (-7%) detracted from fund performance.
- Sold off after Eli Lilly released results on GLP-1 drugs, showing a 63% reduction in the apnoea hypopnea index (AHI).
- Initial impressions suggest GLP-1 could resolve AHI, impacting CPAP demand.
- A closer look shows a significant portion of trial patients still have moderate AHI.
- Post-study discussions indicate moderate AHI will still require intervention, likely through a mix of GLP-1 and CPAP therapy.
- Feedback from physicians suggests side effects like nausea and diarrhea complicate GLP prophylaxis compliance.
- Weight loss trends tied to GLP treatments are often temporary without lifestyle changes.
- Increased rates of bariatric surgery noted due to complications from GLPs, as mentioned by Medibank.
- Demand for CPAP remains robust, with patients prescribed both GLP treatment and CPAP for combined benefits.
- Blackwattle Investment Partners continues to hold because of the enduring demand for CPAP.
Clime Investment Management
30 June 2024
$28.60
Summary
- Clime Investment Management notes that RMD underperformed in June due to concerns over GLP-1 weight loss drugs potentially reducing demand for sleep apnea treatments.
- The sell-off was fueled by the success of the SURMOUNT-OSA trial, which demonstrated GLP-1s' effectiveness in treating obstructive sleep apnea.
- Despite this, Clime Investment Management maintains that CPAP remains crucial, as GLP-1-induced weight loss is gradual.
- The company advocates for a cotherapy approach, highlighting CPAP's immediate benefits and long-term necessity.
- This temporary shift in investor sentiment overlooks RMD's strong market position and the complementary nature of these treatments.
Oracle Advisory Group
30 June 2024
$28.60
Summary
- Oracle Advisory Group highlights continued investment in ResMed (RMD) despite market volatility.
- ResMed's stock initially dropped due to concerns over new weight loss drugs affecting the CPAP market for sleep apnea.
- Oracle topped up holdings as ResMed provided positive quarterly reports, leading to a stock rebound from approximately $22.00 to $33.00.
- Recent worries resurfaced following clinical trial results for Eli Lily's weight loss drug, suggesting a 'disease resolution' for sleep apnea, impacting market perspectives.
- The global sleep apnea market is large, with about 1 billion affected individuals and a low diagnosis rate.
- Increase in awareness due to weight loss drugs may lead to more sleep apnea diagnoses.
- Cost differences favor CPAP therapy, with GLP-1 therapy priced at about $12,000 annually compared to CPAP's $350.
- Combination therapies of weight loss drugs and CPAP may yield the best patient outcomes.
- Concerns exist regarding the practicality of achieving weight loss claims within normal lifestyle choices.
Endeavor Asset Management
30 June 2024
$28.60
Summary
- Endeavor Asset Management notes that Resmed's share price fell by 7% in June due to increased negative sentiment related to competing alternative products in the sleep apnea market.
- Competitors have been actively trying to penetrate the same market, contributing to market pressure.
- Specific competitor clinical trial data was released that negatively impacted RMD's share price, although this information was previously disclosed.
- Despite these challenges, Endeavor Asset Management continues to hold RMD.
ECP Asset Management
30 June 2024
$28.60
Summary
- ECP Asset Management notes that ResMed underperformed due to results from the Surmount-OSA trial, which raised GLP-1 related concerns.
- Despite this, ECP Asset Management maintains that CPAP therapy combined with GLP-1s is the best approach for managing OSA in obese patients.
- ResMed continues to hold a strong position as the market leader in CPAP sales, boasting a significant market share.
- There is a long growth runway for ResMed, reinforcing ECP Asset Management's confidence in the investment thesis.
Endeavor Asset Management
31 May 2024
$31.40
Summary
- Endeavor Asset Management notes ResMed's share price decreased by 4.4% in May.
- The company reported a stronger-than-expected gross profit margin.
- Investor sentiment was weighed down by concerns regarding GLP-1 and competing drugs for OSA treatment (e.g., Apnimed's AD109).
- Despite short-term challenges, ResMed is well-positioned to benefit from long-term trends in the healthcare sector.
- The company continues to innovate in its product offering.
- Endeavor Asset Management remains optimistic about ResMed’s fundamentals and potential for growth.
Endeavor Asset Management
30 Apr 2024
$32.85
Summary
- Endeavor Asset Management highlights that Resmed (RMD) was the Portfolio's second largest contributor during April.
- The share price increased by 9.0% following a stronger than expected gross profit margin, improving by ~240bps versus previous comparable period (pcp) and ~120bps versus consensus.
- This improvement resulted in a +10% beat to consensus earnings per share (EPS).
- Throughout the remainder of April, the share price strength persisted as concerns regarding the effect of GLP-1 transitioned from competitive to being viewed as complimentary.
- Endeavor Asset Management continues to hold Resmed based on these developments.
Blackwattle Investment Partners
30 Apr 2024
$32.85
Summary
- ResMed (+10% in the month) remains the funds top active position, contributing to outperformance.
- ResMed delivered a result that was above market expectations, alleviating concerns over GLP drugs.
- Considered one of the most innovative medical equipment providers globally under Michael Farrell's leadership.
- Cloud connectivity now spans 25m devices, providing data to payers and enhancing user experience.
- Digitally enabled resupply programs support distributors and improve efficiency.
- Market leader in sleep apnoea treatment, facing less competition due to rivals stumbling.
- GLP threat turned into an opportunity, with an accelerating patient funnel for CPAP diagnosis.
- Profitability is improving due to easing freight inflation and transition to the new Airsense 11 platform.
- Airsense 11 offers enhanced features like personal therapy and care check-in, developed over several years.
- Valuation has de-rated from 44x forward EPS in 2021 to 20x in 2023, with a current forward PE of 24x.
- This valuation remains attractive relative to ASX Industrials, given ResMed's superior returns on capital and strong cash flow.
- Tailwinds include an aging population and rising obesity rates, despite the introduction of GLP drugs.
- Benign competitive landscape expected as it will take years for competitors like Philips to rebuild trust after recalls.
- Brand trust is crucial for CPAP products, especially given the conservative nature of sleep physicians.
ELM Responsible Investments
30 Apr 2024
$32.85
Summary
- ELM Responsible Investments notes strong YoY growth in Resmed's FY24 Q3 results.
- Revenue increased by 7% to $1.2 billion, with similar growth on a constant currency basis.
- Gross margin improved by 260 basis points to 57.9%.
- Income from operations surged by 25%.
- Strong results attributed to robust demand for products and software solutions.
- Operational efficiencies, including reduced freight and manufacturing costs, contributed to margin improvement.
- Continued innovation in the core business with the launch of the AirCurve11 series and AirFit F40 mask system.
- Core business revenue grew by 9% in the U.S., Canada, and Latin America; 3% in Europe, Asia, and other markets.
- SaaS business also showed growth, increasing by 8%.
Blackwattle Investment Partners
31 Mar 2024
$29.24
Summary
- RMD was the largest positive contributor to performance during the month.
- RMD rose 13% in March, as the stock continues to climb the wall of worry.
- Concerns regarding the potential impact of GLP-1 class of drugs are being addressed.
- Support came from competitor Fisher & Paykel Healthcare, which showed no impact from GLP-1 drugs.
- Upcoming GLP-1/OSA study (SURMOUNT) from Eli Lilly in May is expected to provide further clarity.
- Expectations that GLP-1 and CPAP treatment in combination will show benefits, contrary to initial market assumptions.
- Blackwattle Investment Partners continues to hold its position, anticipating positive developments.
Clime Investment Management
31 Mar 2024
$29.24
Summary
- Clime Investment Management maintains an overweight stance on RMD.
- RMD delivered a +13% share price return in March.
- Anticipation of further market share gains amidst challenges faced by peers.
- Positive outlook for the stock driven by the unraveling of the negative GLP-1 narrative.
Clime Investment Management
28 Feb 2024
$27.93
Summary
- RMD delivered a strong result, yet underperformed the broader market during February due to risks associated with the GLP-1 weight loss medication.
- RMD is trading well below its longer-term average of price-to-earnings of 30x.
- Clime Investment Management remains bullish on the outlook, given the positive earnings momentum of the business.
- Confidence in improving margins due to strong cost management strategies.
- Sales are expected to be well supported with no significant competition anticipated for at least another year.
- Main rival Phillips is currently scrambling to get back to market and restore consumer confidence.
Blackwattle Investment Partners
31 Jan 2024
$29.20
Summary
- Resmed rose 15% in January, significantly contributing to performance during the month.
- Strong Dec Q results reinforced the company's ability to grow earnings consistently.
- Resmed demonstrated that patients using both GLP-1 and CPAP benefit from combined therapy.
- Key competitor, Philips (PHG EU), continues to struggle due to US recall issues.
- This supports Blackwattle Investment Partners' view that Resmed will maintain higher market share levels in the US.
L1 Capital
31 Jan 2024
$29.20
Summary
- Resmed shares rose by +15% in January after a Q2 earnings report showed better-than-expected gross margin improvement.
- Concerns over GLP-1 weight loss drugs affecting the market were alleviated.
- Resmed is a key player in manufacturing CPAP machines and masks for sleep apnoea treatment.
- L1 Capital established its position in September 2023, after reviewing insights from over 20 sleep physicians and distributors.
- Consultations indicated manageable impacts from GLP-1 weight loss drugs and suggested the stock was over-sold.
- Attendance at the JP Morgan conference unveiled Resmed's analysis, which aligned with L1 Capital's views on GLP-1's impact.
- Despite a recent share price rally, Resmed shares trade at over a 20% discount to historic average forward P/E.
ELM Responsible Investments
31 Jan 2024
$29.20
Summary
- ELM Responsible Investments continues to hold its position in ResMed following their strong Q2 results for fiscal year 2024.
- ResMed reported a 12% year-over-year revenue increase and a 20% rise in non-GAAP operating profit.
- The positive performance is particularly significant after a dip in investor confidence in the latter half of 2023.
- Concerns about GLP-1 drugs impacting demand for CPAP machines were prevalent, given their potential role in reducing obesity-related OSA.
- Despite these concerns, ELM Responsible Investments argued that the market's reaction was an overreaction and unlikely to harm ResMed's sales.
- The recent growth and profit figures suggest that the anticipated negative impacts from GLP-1 drugs have not materialized.
- Additionally, ResMed saw a 24% increase in revenue from its software-as-a-service offerings, indicating strong performance in its non-core residential care software business.
Airlie Funds Management
30 Sept 2023
$22.93
Summary
- Airlie Funds Management added ResMed (RMD.ASX) to its top ten holdings.
- ResMed is a global leader in sleep and respiratory care, focusing on positive airway pressure devices for obstructive sleep apnoea (OSA).
- The share price fell 30% post-FY23 results due to concerns about GLP-1 drugs reducing its addressable market.
- Airlie Funds Management believes the concerns regarding GLP-1 drugs are overdone.
- OSA is a chronic illness affecting breathing during sleep, with CPAP devices being the standard treatment.
- ResMed holds approximately 80% market share, with major competitor Philips out due to an FDA recall.
- The undiagnosed OSA market is vast, with 936 million people globally affected.
- ResMed's device revenue grew over 9% annually prior to the Philips recall, indicating strong demand.
- Current US penetration is at 20%, suggesting significant potential for growth.
- ResMed meets Airlie Funds Management's high investment quality criteria, including strong financials and market position.
- Management quality is high, with a founder-led structure and a successful track record.
- ResMed is currently trading at less than 21x PE, significantly lower than its historical average of 28x PE.
- Airlie Funds Management considers the market reaction to GLP-1 drugs an overreaction.
- CPAP therapy remains the standard of care despite the introduction of GLP-1 drugs.
- One-third of OSA patients are not obese, indicating ongoing demand for CPAP therapy.
- Airlie Funds Management sees a potential combination of GLP-1 drugs and CPAP therapy as a future treatment approach.
- Overall, Airlie Funds Management views the current uncertainty around GLP-1 drugs as a rare investment opportunity in a high-quality company.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Frequently Asked Questions
Who is investing in Resmed CDI (ASX:RMD)?
Fund managers including L1 Capital, Endeavor Asset Management, Blackwattle Investment Partners, Oracle Advisory Group, Equity Trustees Asset Management, Cordis Asset Management, Pengana Capital Group, Totus Capital, Swell Asset Management, Airlie Funds Management, ELM Responsible Investments, ECP Asset Management, Selector Funds Management, Clime Investment Management, Sterling Managed Investments, Alliance Bernstein, SG Hiscock & Company, Alphinity Investment Management, Yarra Capital Management, Pendal Group, Auscap Asset Management and Infinity Asset Management have invested in Resmed CDI (ASX:RMD).
Why do fund managers invest in Resmed CDI?
Fund managers invest in ResMed CDI due to its strong market position and growth prospects in the healthcare sector. The company is a leader in medical devices for sleep apnea, demonstrating steady revenue growth and operational efficiency. Its recent acquisitions and innovative product launches enhance its capabilities and patient outcomes. Additionally, ResMed maintains a solid balance sheet and consistent dividend payments, making it attractive to investors seeking reliable returns. The ongoing demand for its solutions supports a favorable risk/reward profile.
What happened to Resmed CDI (ASX:RMD)?
Fund managers have invested in ResMed CDI due to its solid performance, reflected in an 8-9% revenue growth and improved gross margins, driven by enhanced manufacturing efficiencies and strong demand for its sleep apnea products. Despite concerns regarding the potential impact of GLP-1 drugs, evidence suggests minimal disruption to ResMed's market. The company’s strategic focus on increasing its manufacturing footprint in the U.S. and expanding its distribution capabilities positions it well for future growth, alongside healthy cash flow and a commitment to share buybacks, signaling confidence in long-term performance.
What is the short interest in Resmed CDI (ASX:RMD)?
The short interest in Resmed CDI (ASX:RMD) is 0.17% which makes it the 365th most shorted stock on the ASX. Of the 579.4M shares that Resmed CDI has on issue, 1.0M have been sold short.
What does Resmed CDI (ASX:RMD) do?
ResMed, Inc. engages in providing digital health and cloud-connected medical devices. Its digital health technologies and cloud-connected medical devices transform care for people with sleep apnea, chronic obstructive pulmonary disease, or COPD, and other chronic diseases. The firm operates through the Sleep and Respiratory Care and Software as a Service segments. The Sleep and Respiratory Care segment engages in the sleep and respiratory disorders sector of the medical device industry. The Software as a Service segment provides business management software as a service to out-of-hospital health providers. The company was founded by Peter C. Farrell in June 1989 and is headquartered in San Diego, CA.
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