ResMed offers undisputed global scale and an incredibly sticky, high-margin ecosystem. Operating with an estimated 60% share of the worldwide sleep-apnea flow generator market, the corporation has built an unparalleled moat of over 170 million connected health devices. This immense footprint funnels into proprietary cloud platforms like AirView and myAir, creating an automated ecosystem where patient compliance is monitored seamlessly.
Furthermore, the company’s financial position is rock-solid and highly defensive. Plus, the company is uniquely insulated from macroeconomic downturns. The stock has been pushed down to an attractive valuation floor due to overblown market fears regarding GLP-1 weight-loss medications. However, real-world data indicates that GLP-1 adoption is actually increasing patient screening and diagnosis rates, expanding the total addressable market for CPAP therapy and paving the way for sustained, double-digit earnings growth.
The stock trades at just 17.1 times the company’s forward earnings forecast.
RESMED INC. (New York symbol RMD; www.resmed.com) makes and sells medical devices for people with sleep apnea, chronic obstructive pulmonary disease (COPD), and other chronic diseases. These include CPAP (nasal continuous positive airway pressure) systems and both invasive and non-invasive ventilators for chronic obstructive pulmonary disease (COPD).
ResMed also has a growing software business to serve agencies providing out-of-hospital care, including home medical equipment, and home health and hospice services.
CPAP delivers pressurized air at room temperature through the use of tubing and a mask. That delivery system eliminates apnea events during sleep. CPAP is regarded as the most-effective treatment for sleep apnea and can improve the patient’s sleep overnight, dramatically improving the quality of life for many sufferers.
One ResMed-led study estimates that nearly one billion people worldwide have obstructive sleep apnea, with more than 85% them undiagnosed.
Another ResMed-led study estimates that 480 million people have chronic obstructive pulmonary disease (COPD), and that population is expected to reach almost 600 million by 2050.
COPD is a chronic lung disease where airflow is obstructed and interferes with normal breathing. Emphysema and chronic bronchitis are the two most common conditions that contribute to COPD.
With each new machine that ResMed sells, it acquires a potential long-term replacement-parts customer: While the CPAP machine itself lasts five years or more, the tubing, masks and other accessories it relies on need to be replaced several times a year. The same applies to the company’s other ventilation devices. Devices contribute around 51% of ResMed’s sales, while masks and accessories contribute 37%. Software makes up the remaining 12%.
The SaaS business currently contributes just 12% of ResMed’s revenue but is a strong growth area.
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The growth in its subscription-based software business means that ResMed will sell its products under continuous service agreements instead of charging customers a one-time fee on the initial sale of its software. Under SaaS, the company charges a smaller but recurring fee every month (or year or whatever), according to the contract. For the customer, it’s like renting the software instead of owning it.
This cuts the company’s initial revenue and the customers’ initial expense, but it gives the company a larger long-term payoff. That’s because payments continue indefinitely, so long as the customer chooses to keep paying for the service.
ResMed’s strong quarter for both sales and profits
In the three months ended March 31, 2026, ResMed’s revenue rose 10.8%, to $1.43 billion from $1.29 billion a year earlier. Revenue rose due to strong customer demand and sustained momentum across global device and mask markets.
Excluding one-time items, earnings rose 14.3% due to strong sales growth and gross margin improvements, to $417.2 million, or $2.86 a share, from $348.5 million, or $2.37.
The company plans to open a new distribution centre in Greenwood, Indiana. Beginning in 2027, the centre will expand the company’s U.S. presence and strengthen ResMed’s distribution capacity to better serve patients and providers across North America.
The Greenwood centre will operate as a major logistics hub and enhance the delivery of essential healthcare products. Once fully operational, Greenwood will improve two-day transit coverage across North America from 75% to 90% and shorten delivery times to Canada by one full day.
The shares trade at a reasonable 17.1 times the $11.11 a share that ResMed is forecast to make in 2026, while paying a 1.3% yield.
Recommendation in Power Growth Investor: ResMed Inc. is a buy.
