Assessing ResMed (RMD) Valuation As Growth And Margins Improve And P/S Lingers Below Five Year Average

Simply Wall St.01-15

ResMed (RMD) is back on investor radars after recent data highlighted its revenue and earnings growth, improving free cash flow margins, and a share price sitting below its five year average P/S ...

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At the same time, a 1-year total shareholder...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"RMD.AU":"Resmed DRC","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","LU2008162690.USD":"FIDELITY FUNDS - ASIA PACIFIC OPPORTUNITIES \"A\" (USD) ACC","BK4585":"ETF&股票定投概念","BK7007":"医疗保健设备","IE00B5TLWC47.USD":"BNY MELLON LONG-TERM GLOBAL EQUITY \"B\" (USD) ACC","BK4567":"ESG概念","LU2177674079.SGD":"Fidelity Asia Pacific Opportunities A-ACC-SGD (hedged)","BK4588":"碎股","BK4548":"巴美列捷福持仓","BK4082":"医疗保健设备","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","RMD":"瑞思迈","BK4504":"桥水持仓","BK7501":"新冠治疗股"},"translate_title":"随着增长和利润率的改善以及市盈率仍低于五年平均水平，评估瑞思迈(RMD)的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RMD.AU":1.5,"RMD":1,"DCF":1},"content_text":"ResMed (RMD) is back on investor radars after recent data highlighted its revenue and earnings growth, improving free cash flow margins, and a share price sitting below its five year average P/S multiple. See our latest analysis for ResMed. The recent 1-day share price return of 1.90% and 7-day share price return of 4.55% suggest some short term momentum is building, even though the 90-day share price return of 3.89% points to a softer patch. At the same time, a 1-year total shareholder return of 12.19% and 5-year total shareholder return of 24.26% reflect steadier long term gains. If ResMed’s move has you looking across healthcare, this is a good moment to scan healthcare stocks and see what else fits your watchlist. So with revenue and earnings growing, stronger free cash flow margins, and a P/S ratio sitting below the five year average, is ResMed quietly offering value here? Or is the market already pricing in its next leg of growth? AdvertisementMost Popular Narrative: 12.1% Undervalued With ResMed last closing at $259.51 against a narrative fair value of $295.13, the current setup frames a modest undervaluation story that leans heavily on margins and earnings power. Optimization initiatives in procurement, manufacturing, and logistics, along with the build out of the U.S. manufacturing footprint, are structurally improving gross margins. When combined with operating leverage from global scale, these changes are expected to influence overall earnings and free cash flow. Read the complete narrative. Curious what kind of revenue trajectory, margin profile, and future P/E multiple are baked into that valuation gap? The narrative rests on specific growth, profitability, and discount rate assumptions, plus a sizeable earnings target a few years out. If you want to see exactly which expectations have to hold for that pricing to make sense, the full narrative lays out the math in detail. Result: Fair Value of $295.13 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the story could change if U.S. PAP demand softens further or if GLP-1 adoption and alternative therapies weigh more heavily on device volumes and pricing power. Find out about the key risks to this ResMed narrative. Another View: Our DCF Says Fairly Priced While the analyst narrative points to a 12.1% undervaluation, our DCF model presents a flatter picture. With ResMed at $259.51 and our DCF fair value at $258.28, the stock appears roughly in line with its cash flow assumptions rather than clearly cheap or expensive. That contrast raises a useful tension for you as an investor. Are earnings and margin stories strong enough that a simple multiples view feels more convincing, or does a cash flow lens keep expectations in check and argue for patience? Look into how the SWS DCF model arrives at its fair value. RMD Discounted Cash Flow as at Jan 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ResMed for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 884 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.  Build Your Own ResMed Narrative If you see the numbers differently or just prefer to test your own assumptions, you can spin up a custom ResMed story in a few minutes: Do it your way. A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding ResMed. Looking for more investment ideas? ResMed might be front of mind today, but you may give yourself a stronger edge by continuously refreshing your watchlist with new, high quality ideas.  Spot potential bargains early by checking out these 884 undervalued stocks based on cash flows that may offer pricing that differs from their underlying cash flow profiles. Zero in on high yield potential with these 12 dividend stocks with yields > 3% that could help you build a more income focused portfolio. Get ahead of the next wave in digital assets using these 80 cryptocurrency and blockchain stocks that are tied to blockchain and cryptocurrency themes.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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