ResMed Inc. (RMD)
Healthcare · NYSE · US
Fundamentals
Valuation and ratings
ResMed Inc. trades at $202.76, which is 24% below the $251.72 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 88 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 19.6 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About ResMed Inc.
ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications to diagnose, treat, and manage respiratory disorders in the United States and internationally. The company operates in two segments, Sleep and Breathing Health, and Residential Care Software. It offers sleep recorders for the diagnosis and titration of sleep apnea in sleep clinics, hospitals, and at home, including ApneaLink Air, a portable diagnostic device that measures oximetry, respiratory effort, pulse, nasal flow, and snoring; NightOwl, a portable, cloud-connected, and disposable diagnostic device that measures AHI based on derived peripheral arterial tone, actigraphy, and oximetry; and EasyCare Tx, a sleep lab solution. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; and connectivity module which provides a cellular connection between compatible ventilation devices and AirView system. In addition, the company offers Brightree solutions which are solutions and services for organizations in home medical equipment and pharmacy, orthotic and prosthetic, and home infusion; HEALTHCAREfirst solutions that offers electronic health record, software, billing and coding services, and advanced analytics that enables home health and hospice agencies to optimize clinical, financial and administrative processes; MatrixCare EHR software as a service solutions used by skilled nursing and senior living providers, life plan communities, and home health and hospice sectors; and MEDIFOX DAN software solutions that is used by residential care providers, such as home health and nursing home providers. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.
RMD passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
13 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$101.07M · 0.1% of book
- Marshall Wace, MARSHALL WACE, LLP$85.59M · 0.1% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$77.80M · 0.0% of book
- Ken Griffin, CITADEL ADVISORS LLC$74.55M · 0.0% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$70.14M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is ResMed Inc. (RMD) undervalued?
Against our discounted cash flow estimate of $251.72, RMD at $202.76 is 24% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own RMD?
13 of the institutions we track reported a position in RMD in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is RMD's P/E ratio?
RMD trades at 19.6 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for RMD, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.