RMD — ResMed Inc.

The Q4 FY26 beat (non-GAAP EPS $2.95 vs $2.89 consensus, revenue +9% YoY) and $1.6B FY26 FCF support the bull case, but FY27 guidance of 5-7% core revenue growth triggered price-target cuts and left the sell-side at 13 buy/17 hold/5 sell with a consensus Hold. As of 2026-08-27 the average price target of $238.70 is only about 1% above the market price, so sentiment is cautious/neutral rather than enthusiastic.

Revenue grew steadily from $1.10B in Sep-2023 to $1.46B in Jun-2026. YoY growth in the last four reported quarters was +9.1% (Sep-25), +11.0% (Dec-25), +10.8% (Mar-26), and +8.6% (Jun-26) - stable but modestly decelerating. GAAP operating margin improved from the mid-20s in late 2023/early 2024 to ~35% in Dec-25/Mar-26; Jun-26 dropped to 30.7% vs 33.7% a year earlier, but TTM operating margin is still 33.5%, so the quarter looks like recall/transition noise rather than structural margin collapse. FY26 FCF of ~$1.65B per FMP is roughly flat with FY25 but still excellent cash conversion.

At $235.76 as of 2026-08-27, RMD trades at 22.6x trailing EPS, ~19.5x forward EPS on the $12.10 next-FY estimate, 6.05x sales, and 5.18x book. Its 5-year average P/E is 29.5x and 5-year average P/S is 6.87x, so by its own history it is cheap. The PEG of 2.42 on near-term growth is less compelling, but a ~19.5x forward multiple for a 19.1% ROIC, 33.5% operating margin, net-cash franchise is a fair-to-slightly-cheap absolute multiple.

At $235.76, the market is paying ~$19.50 for every $1 of next-FY estimated EPS, a de-rated multiple versus history that already discounts slower FY27 growth and GLP-1 obesity-drug risk. If ResMed simply hits $12.10 EPS and holds a 19.5x multiple, the stock sits near $236 - so current price already reflects the near-term earnings path. Upside would need a re-rating from fading GLP-1 fears, Astral resolution, or faster-than-guided EPS growth; downside would come from guidance cuts or evidence that GLP-1s are actually eroding CPAP demand.

As of 2026-08-27, RSI was 65.76, price was $235.76, +4.7% versus the 20-day SMA, +12.1% versus the 50-day SMA, and +3.0% versus the 200-day SMA. That is a positive short-term trend but not overbought, and the stock sits roughly mid-range within its $180.27-$284.87 52-week band. Entry-timing implication: do not chase the strength; a pullback toward the 20-day or 50-day SMA would offer a better risk/reward.

• Ongoing GLP-1 weight-loss drug narrative remains a sentiment overhang on CPAP/OSA device demand.
• FDA enforcement and medical-device safety scrutiny are elevated; the Astral recall illustrates regulatory downside.
• Cooling inflation and stabilizing rates are supportive for a high-FCF, low-beta healthcare compounder.
• Aging population and underdiagnosed OSA support long-run demand, partly offsetting GLP-1 fears.
• Portfolio reshaping through the MatrixCare divestiture and Noctrix acquisition changes near-term revenue mix and comparability.

• Q1 FY2027 earnings, estimated October 29, 2026 - the first hard check on whether 5-7% core growth guidance is tracking.
• Morgan Stanley Global Healthcare Conference on September 15, 2026 - management may clarify Astral, MatrixCare, and GLP-1 strategy.
• Resolution or escalation of the Astral ventilator recall/repair program; regulatory clearance would remove a near-term overhang.
• Clean closing of the $490M MatrixCare divestiture and smooth Noctrix integration.

• GLP-1 receptor agonists could reduce the long-term addressable OSA/CPAP population, pressuring growth.
• Astral ventilator recall could widen, trigger additional regulatory costs, or damage ResMed's device-safety reputation.
• FY27 5-7% core growth guidance plus portfolio divestiture may continue to slow reported revenue; any Q1 miss would likely hit the stock.
• Multiple compression if rates re-accelerate or investors rotate away from defensive healthcare growth names.

ResMed is a high-quality, net-cash, 19%-ROIC franchise with durable sleep-apnea demand, but the market has already trimmed the multiple to ~19.5x forward earnings to reflect slower growth and GLP-1 risk. As of 2026-08-27, that makes it a reasonable long-term buy rather than a deep-value bargain: cash generation and balance sheet cushion the downside, while upside depends on a re-rating that has not happened yet. I lean bullish but would prefer adding on weakness.

Simplified two-stage DCF: FY26 FCF of $1.65B, 8% FCF growth for five years, 3% terminal growth, 9% discount rate, plus $1.07B net cash, divided by ~145M shares = $249.15. That also cross-checks to roughly 20.6x forward EPS, below the 5-year average P/E of 29.5x, which is reasonable for a high-quality but slower-growing med-tech franchise.