ResMed (RMD) just secured FDA clearance for its AI driven Smart Comfort feature, a personalized CPAP comfort system built on over 100 million nights of sleep data, and investors are weighing what this means for long term growth.
See our latest analysis for ResMed.
ResMed’s latest Smart Comfort milestone lands while the stock trades at $253.07 and posts a resilient year to date share price return of 10.76 percent alongside a three year total shareholder return of 24.42 percent, suggesting steady but not explosive momentum.
If this kind of AI led healthcare innovation interests you, it is worth exploring how other names in the space are setting up using healthcare stocks.
With shares trading at a modest discount to analyst targets and growth steadily compounding rather than exploding, is ResMed quietly undervalued here, or are investors already paying up for years of AI powered expansion?
Most Popular Narrative: 14.3% Undervalued
With ResMed closing at $253.07 against a narrative fair value near $295, the spread implies markets may be underestimating its compounding 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, which, when combined with operating leverage from global scale, are expected to boost overall earnings and free cash flow.
Curious how steady, mid single digit growth can still back an aggressive profit outlook and premium multiple, even with a modest discount rate baked in? The narrative quietly leans on rising margins, disciplined buybacks, and a future earnings base that looks very different from today. Want to see exactly how those moving parts stack up into that near three hundred dollar fair value, and what assumptions really carry the model?
Result: Fair Value of $295.13 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, several things could still derail that neat margin story, from GLP-1 driven demand shifts to renewed pricing pressure in core U.S. PAP markets.
Find out about the key risks to this ResMed narrative.
Build Your Own ResMed Narrative
If you are not fully convinced by this view or simply prefer to dig into the numbers yourself, you can build a customized version in just a few minutes, starting with Do it your way.
A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding ResMed.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data 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 financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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