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ResMeds Resilience: Analysts Upgrade Stock Amid GLP-1 Concerns and Strong Margins
When the market murmurs that a company’s share is slipping, a bullish analyst may say otherwise.
That’s the case with ResMed Inc. (RMD), the San Diego‑based maker of cloud‑connected devices for sleep apnea and chronic respiratory conditions. A full‑time equity analyst, who also trades part‑time, has upgraded the stock to a strong‑buy, arguing that ResMed’s profitability is on an upward trend even as it faces mounting market‑share pressure.
The analyst dismissed worries about the company’s exposure to the glucagon‑like peptide‑1 (GLP‑1) drug market as overstated. While competitors such as Philips Respironics (PHG) and Apnimed may erode a slice of ResMed’s sleep‑apnea market, the analyst believes the remaining share will prove more profitable. The upgrade comes despite the stock’s current trading price suggesting a revenue decline and margin contraction.
Financials back the analyst’s view. In fiscal 2024, ResMed reported revenue of $4.7 billion, a double‑digit rise from the prior year. Operating margins have consistently outperformed peers in the medical‑device sector, with the company’s gross and operating margins exceeding those of comparable firms by a wide margin. These figures illustrate that the market’s perception of a shrinking top line and tightening margins is misplaced.
ResMed’s product portfolio remains diversified. Core offerings include continuous positive airway pressure (CPAP) devices, bilevel ventilators, and associated masks for sleep apnea, as well as devices for chronic obstructive pulmonary disease (COPD). During the COVID‑19 pandemic, the company produced hundreds of thousands of ventilators and bilevel devices to support patients with respiratory symptoms. It also supplies software that helps out‑of‑hospital care agencies—such as home health, hospice, and senior‑living facilities—streamline transitions of care.
Operating in more than 140 countries, ResMed maintains manufacturing facilities in Australia, Singapore, France, and the United States and employs over 8,000 people worldwide.
Competitive pressures are a key part of the analyst’s assessment. PHG’s re‑entrance into the sleep‑apnea market and Apnimed’s drug commercialization efforts are noted as potential threats. Yet the analyst argues that ResMed’s market dominance is unlikely to be eroded in the near term. The company’s established distribution network, strong brand recognition, and cloud‑connectable technology give it a competitive edge.
The strong‑buy upgrade rests on ResMed’s robust margins and double‑digit revenue growth. The analyst also points out that the stock is trading at a valuation that does not reflect the company’s current profitability. The analyst’s disclosure states that they hold no stock, option, or derivative position in ResMed and have no plans to initiate such positions within the next 72 hours.
Seeking Alpha’s standard disclaimer is also included, noting that past performance is not a guarantee of future results and that the analyst’s views are personal and not endorsed by the platform.
In summary, the analyst believes ResMed’s financial performance—particularly its high margins and growing revenue—outweighs the potential impact of GLP‑1 market concerns and competitive threats. The stock’s current price, which reflects expectations of declining revenue and margins, is considered undervalued by the analyst.
The company’s next quarterly earnings report, scheduled for early 2027, will provide further insight into whether the upward trajectory in revenue and margins continues. Investors and analysts will also watch for any updates on PHG’s market activities and Apnimed’s drug commercialization, as these developments could influence ResMed’s competitive positioning.
The analyst’s upgrade signals confidence in ResMed’s ability to maintain profitability and market share, but the company’s future performance will depend on its capacity to navigate evolving market dynamics and regulatory environments.
That’s the case with ResMed Inc. (RMD), the San Diego‑based maker of cloud‑connected devices for sleep apnea and chronic respiratory conditions. A full‑time equity analyst, who also trades part‑time, has upgraded the stock to a strong‑buy, arguing that ResMed’s profitability is on an upward trend even as it faces mounting market‑share pressure.
The analyst dismissed worries about the company’s exposure to the glucagon‑like peptide‑1 (GLP‑1) drug market as overstated. While competitors such as Philips Respironics (PHG) and Apnimed may erode a slice of ResMed’s sleep‑apnea market, the analyst believes the remaining share will prove more profitable. The upgrade comes despite the stock’s current trading price suggesting a revenue decline and margin contraction.
Financials back the analyst’s view. In fiscal 2024, ResMed reported revenue of $4.7 billion, a double‑digit rise from the prior year. Operating margins have consistently outperformed peers in the medical‑device sector, with the company’s gross and operating margins exceeding those of comparable firms by a wide margin. These figures illustrate that the market’s perception of a shrinking top line and tightening margins is misplaced.
ResMed’s product portfolio remains diversified. Core offerings include continuous positive airway pressure (CPAP) devices, bilevel ventilators, and associated masks for sleep apnea, as well as devices for chronic obstructive pulmonary disease (COPD). During the COVID‑19 pandemic, the company produced hundreds of thousands of ventilators and bilevel devices to support patients with respiratory symptoms. It also supplies software that helps out‑of‑hospital care agencies—such as home health, hospice, and senior‑living facilities—streamline transitions of care.
Operating in more than 140 countries, ResMed maintains manufacturing facilities in Australia, Singapore, France, and the United States and employs over 8,000 people worldwide.
Competitive pressures are a key part of the analyst’s assessment. PHG’s re‑entrance into the sleep‑apnea market and Apnimed’s drug commercialization efforts are noted as potential threats. Yet the analyst argues that ResMed’s market dominance is unlikely to be eroded in the near term. The company’s established distribution network, strong brand recognition, and cloud‑connectable technology give it a competitive edge.
The strong‑buy upgrade rests on ResMed’s robust margins and double‑digit revenue growth. The analyst also points out that the stock is trading at a valuation that does not reflect the company’s current profitability. The analyst’s disclosure states that they hold no stock, option, or derivative position in ResMed and have no plans to initiate such positions within the next 72 hours.
Seeking Alpha’s standard disclaimer is also included, noting that past performance is not a guarantee of future results and that the analyst’s views are personal and not endorsed by the platform.
In summary, the analyst believes ResMed’s financial performance—particularly its high margins and growing revenue—outweighs the potential impact of GLP‑1 market concerns and competitive threats. The stock’s current price, which reflects expectations of declining revenue and margins, is considered undervalued by the analyst.
The company’s next quarterly earnings report, scheduled for early 2027, will provide further insight into whether the upward trajectory in revenue and margins continues. Investors and analysts will also watch for any updates on PHG’s market activities and Apnimed’s drug commercialization, as these developments could influence ResMed’s competitive positioning.
The analyst’s upgrade signals confidence in ResMed’s ability to maintain profitability and market share, but the company’s future performance will depend on its capacity to navigate evolving market dynamics and regulatory environments.
