Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 6.6 |
| EV/EBITDA | 3.6 |
| Fwd P/E | 7.2 |
| PEG | 6.3 |
| Analyst target | 6.0 |
- ▸Forward P/E: 17.3x
- ▸PEG: 1.18
RMD · Why this verdict
Why ResMed (RMD) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
ResMed scores 9.2 out of 10 on quality with a wide economic moat, 25% return on equity, 27% net margins, and a perfect Piotroski F-Score of 9 out of 9, placing it in the top tier of all healthcare companies evaluated on fundamental business strength. Quality breakdown | Return on equity remains above 20% and net margins stay above 24% over the next four quarters, confirming the moat is holding despite competitive pressure from connected device alternatives. | →Stable |
| CounterThe premium valuation implied by a forward price-to-earnings of 15.9 times leaves little cushion if GLP-1 weight-loss drugs reduce the obstructive sleep apnea patient population by reducing obesity-related incidence. | ||
ResMed has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 2.53%, demonstrating consistent delivery against consensus expectations even in a challenging competitive environment. Earnings | The beat streak extends to six or more consecutive quarters as device adoption in undiagnosed sleep apnea populations grows and software subscription revenue scales. | →Stable |
| CounterAn average surprise of only 2.53% is a thin margin; modest estimation revisions could easily convert to misses, particularly if GLP-1 drug adoption accelerates faster than management anticipates. | ||
The stock is in a confirmed downtrend with the 200-day moving average slope at -4.5% over 30 days and falling on-balance volume, but analyst consensus sees 40% upside to targets, creating a divergence between price action and fundamental valuation. Momentum breakdown | Price reclaims the 200-day moving average within 12 months and the entry target of $188.81 is reached, beginning a move toward the analyst consensus target near $243. | →Stable |
| CounterDowntrends in medical device companies can persist for extended periods when driven by secular concerns like GLP-1 disruption; catching a falling knife often requires a specific positive catalyst rather than just waiting for mean reversion. | ||
The analyst consensus price target implies 40% upside from the current $192.74, ranking the analyst upside score at 9.2 out of 10, while the forward price-to-earnings multiple of 15.9 times is attractively valued for a wide-moat healthcare compounder. Sentiment breakdown | The stock reaches at least $240 within 12 months as the technical downtrend reverses and the market re-rates the company on its fundamental quality. | →Stable |
| CounterAnalyst price targets lag significantly in their response to new structural threats; the 40% upside may reflect targets set before the full impact of GLP-1 disruption was understood, and upgrades may be slow to materialize. | ||
ResMed scores 9.2 out of 10 on quality with a wide economic moat, 25% return on equity, 27% net margins, and a perfect Piotroski F-Score of 9 out of 9, placing it in the top tier of all healthcare companies evaluated on fundamental business strength.
→StableQuality breakdown
- Expectation
- Return on equity remains above 20% and net margins stay above 24% over the next four quarters, confirming the moat is holding despite competitive pressure from connected device alternatives.
CounterThe premium valuation implied by a forward price-to-earnings of 15.9 times leaves little cushion if GLP-1 weight-loss drugs reduce the obstructive sleep apnea patient population by reducing obesity-related incidence.
ResMed has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 2.53%, demonstrating consistent delivery against consensus expectations even in a challenging competitive environment.
→StableEarnings
- Expectation
- The beat streak extends to six or more consecutive quarters as device adoption in undiagnosed sleep apnea populations grows and software subscription revenue scales.
CounterAn average surprise of only 2.53% is a thin margin; modest estimation revisions could easily convert to misses, particularly if GLP-1 drug adoption accelerates faster than management anticipates.
The stock is in a confirmed downtrend with the 200-day moving average slope at -4.5% over 30 days and falling on-balance volume, but analyst consensus sees 40% upside to targets, creating a divergence between price action and fundamental valuation.
→StableMomentum breakdown
- Expectation
- Price reclaims the 200-day moving average within 12 months and the entry target of $188.81 is reached, beginning a move toward the analyst consensus target near $243.
CounterDowntrends in medical device companies can persist for extended periods when driven by secular concerns like GLP-1 disruption; catching a falling knife often requires a specific positive catalyst rather than just waiting for mean reversion.
The analyst consensus price target implies 40% upside from the current $192.74, ranking the analyst upside score at 9.2 out of 10, while the forward price-to-earnings multiple of 15.9 times is attractively valued for a wide-moat healthcare compounder.
→StableSentiment breakdown
- Expectation
- The stock reaches at least $240 within 12 months as the technical downtrend reverses and the market re-rates the company on its fundamental quality.
CounterAnalyst price targets lag significantly in their response to new structural threats; the 40% upside may reflect targets set before the full impact of GLP-1 disruption was understood, and upgrades may be slow to materialize.
TrendMatrix Research · core thesis
Engine thesis — one sentence
ResMed is a wide-moat medical devices company with a perfect Piotroski F-Score of 9 out of 9, 25% return on equity, and four consecutive earnings beats, currently experiencing a technical downtrend that creates an accumulation opportunity for investors with a 12-to-18 month horizon.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
9.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.4 |
| ROA | 9.8 |
| Gross margin | 8.4 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 10.0 |
| FCF quality | 6.8 |
| Moat | 9.0 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 25%
- ▸Strong margins: 27%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
4.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 4.1 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.2 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 1.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -4.9%/30d — confirmed downtrend
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 8.1 |
| erm sentiment | 4.4 |
- ▸Analyst upside: 24%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $3,130,783 (0.010% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 9.0 |
| growth rank | 5.3 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.0 |
| 52w position | 4.4 |
| gap | 5.0 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.9 |
| days to cover | 1.6 |
| volatility | 5.7 |
| put call | 0.0 |
| implied vol | 6.2 |
| beta | 8.3 |
| debt equity | 9.5 |
- ▸Elevated put/call: 3.17
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.8 |
| dividend safety | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 114.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.4<4.5
- ASYMMETRY:1.0<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.00
Upside
+11.9%
Downside
11.9%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 68
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Quality at 9.2; weakest: Technical at 2.4. No conviction either direction.
The strongest dimensions are Quality at 9.2, Sentiment at 6.8, and Catalyst at 6.2; the weakest are Technical at 2.4, Momentum at 4.4, and Growth at 4.7. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat Compounder Quality
Trip ifReturn on equity falls below 18% for 2 consecutive quarters, signaling the competitive moat is weakening under margin pressure.
- P2Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, ending the sustained beat pattern.
- P3Technical Downtrend Accumulation Window
Trip ifPrice drops below $170, more than 12% below the current $192.74, confirming the downtrend is deepening rather than stabilizing.
- P4Analyst Upside Valuation Gap
Trip ifAnalyst consensus price target falls below $200, indicating analysts are cutting their fair value estimates by more than 20% from current levels.