Is It Time To Reassess ResMed (RMD) After Recent Medical Devices Sector Interest

Simply Wall St

Thu, February 12, 2026 at 6:16 PM GMT+9 4 min read

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RMD

-1.49%

RSMDF

+6.12%

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If you are wondering whether ResMed's current share price lines up with its underlying worth, you are not alone. That is exactly what this article will unpack for you.

ResMed recently closed at US$259.62, with returns of 1.3% decline over 7 days, 0.7% over 30 days, 6.0% year to date, 11.0% over 1 year, 24.3% over 3 years, and 35.7% over 5 years. This gives investors a useful backdrop before comparing price to value.

Recent news flow around ResMed has largely focused on ongoing interest in its role within the healthcare and medical devices space, along with broader discussions about how sleep and respiratory care demand shapes investor expectations. This context helps frame why the share price moves may matter when you start lining them up against valuation metrics.

On Simply Wall St's framework, ResMed currently scores 4 out of 6 on its undervaluation checks. Next, we will look at how different valuation methods arrive at that view and why there may be an even better way to think about value by the end of this article.

ResMed delivered 11.0% returns over the last year. See how this stacks up to the rest of the Medical Equipment industry.

Approach 1: ResMed Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model looks at the cash ResMed is expected to generate in the future and then discounts those projected cash flows back into today’s dollars to estimate what the business might be worth now.

For ResMed, the latest twelve month free cash flow is about $1.78b. Analysts have provided detailed estimates out to 2030, with Simply Wall St then extending those forecasts further using its own assumptions. By 2035, the model is working with projected free cash flows of around $2.39b, all expressed in $ and discounted back using a 2 Stage Free Cash Flow to Equity approach.

Putting those cash flows together, the DCF model arrives at an estimated intrinsic value of about $277.61 per share. Compared with the latest share price of roughly $259.62, the model suggests ResMed trades at an implied discount of around 6.5%, which is a relatively small gap.

Result: ABOUT RIGHT

ResMed is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.

RMD Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ResMed.

Approach 2: ResMed Price vs Earnings

For a profitable company like ResMed, the P/E ratio is a useful anchor because it links what you pay per share directly to the earnings the business is generating today.

Story Continues  

What counts as a “normal” P/E depends a lot on how quickly earnings are expected to grow and how risky those earnings are. Higher growth and perceived stability can justify a higher P/E, while slower growth or higher risk usually line up with a lower one.

ResMed currently trades on a P/E of about 25.45x, compared with a Medical Equipment industry average of roughly 30.83x and a peer group average around 36.63x. Simply Wall St also calculates a proprietary “Fair Ratio” for ResMed of about 29.79x. This Fair Ratio reflects factors such as earnings growth, profit margins, the company’s size, its industry and key risks, so it can be more tailored than a simple comparison with peers or the broad industry.

Putting that together, ResMed’s actual P/E of 25.45x sits below the Fair Ratio of 29.79x, which points to the shares trading at a discount on this metric.

Result: UNDERVALUED

NYSE:RMD P/E Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your ResMed Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, which let you tell your story about ResMed by tying your assumptions for future revenue, earnings and margins into a forecast. This forecast can then be turned into a fair value estimate and compared with the current price to help you decide whether the stock looks attractive to you. Each Narrative sits on the Community page, updates automatically when new news or earnings are released, and allows very different views to coexist. For example, one investor might see ResMed as worth US$325.00 based on strong long term growth drivers, while another might see fair value closer to US$215.00 because of concerns about competition, regulation and pricing pressure.

Do you think there’s more to the story for ResMed? Head over to our Community to see what others are saying!

NYSE:RMD 1-Year Stock Price Chart

_ 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._

Companies discussed in this article include RMD.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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