ResMed Inc. (RMD) Intrinsic Value & DCF Valuation
Medical - Devices · NYSE
Current Price
$214.29
Intrinsic Value
$305.52
+29.9% margin of safety
What Is ResMed Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of ResMed Inc. (RMD) at $305.52 per share, compared with a market price of $214.29, a margin of safety of +29.9%. The base case assumes 12.4% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $244.64 to $375.25. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is ResMed Inc. (RMD) Undervalued?
At $214.29, RMD trades about 29.9% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Strong Brand & Doctor Loyalty
ResMed's established brand and deep relationships with sleep specialists create significant loyalty. Doctors trust their devices for patient care, leading to repeat prescriptions and fewer physician-driven switches.
↑Data & Ecosystem Lock-in
Connected devices generate valuable patient data, enhancing treatment efficacy and creating a sticky ecosystem. This data advantage makes it harder for competitors to replicate ResMed's integrated solutions.
↑Regulatory Hurdles & Reimbursement
Navigating complex medical device regulations and securing favorable reimbursement pathways are significant barriers. ResMed's experience and established processes provide a durable advantage.
INVESTMENT RISKS
↓Supply Chain Disruptions
Reliance on global supply chains for components can lead to production delays and increased costs. Any significant disruption could impact product availability and profitability.
↓Product Recalls & Quality Issues
A major product recall, similar to competitors, could severely damage brand reputation and lead to significant financial liabilities. Maintaining stringent quality control is paramount.
↓Technological Obsolescence
Rapid advancements in medical technology could render current product lines obsolete. Continuous innovation and R&D investment are crucial to stay ahead of emerging solutions.
Base case
RMD base case valuation
Intrinsic Value
$305.52
Margin of safety
+29.9%
Expected annual return
+7.4%
Base case assumptions: 12.4% annual growth, 10.0% discount rate, 18x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the RMD valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for ResMed Inc. respond.
Open DCF Calculator for RMDCompany Overview
ResMed Inc. is a leading global medical technology enterprise engaged in the creation, production, distribution, and marketing of healthcare devices and connected digital solutions. The company operates through two primary segments: Sleep and Respiratory Care, and Software as a Service. Its extensive product range addresses a variety of respiratory disorders, encompassing advanced medical and consumer technologies, ventilation devices, diagnostic equipment, mask systems for both clinical and personal use, headgear, and related accessories, alongside dental devices. ResMed also provides sophisticated cloud-based informatics to enhance patient management and operational efficiency. Notable software offerings in its respiratory portfolio include AirView, for remote device monitoring and setting adjustments; myAir, a personalized application designed to support sleep apnea patients with education and troubleshooting for better engagement and adherence; and U-Sleep, a compliance tracking platform for home medical equipment providers. Complementing these are connectivity modules and Propeller solutions. Furthermore, ResMed offers a robust suite of out-of-hospital software. This includes Brightree, a business management platform for various home care service providers (e.g., HME, pharmacy, infusion, orthotics, prosthetics); MatrixCare, providing care management for senior living, skilled nursing, and hospice organizations; and HEALTHCAREfirst, which supplies electronic health records, billing, coding services, and analytics for home health and hospice agencies. ResMed distributes its offerings primarily to sleep clinics, home healthcare dealers, and hospitals via a global network of distributors and a direct sales force, serving approximately 140 countries. Founded in 1989, the company's headquarters are located in San Diego, California.
Financial Metrics — RMD Stock Valuation Data
Revenue/Share (TTM)
$37.81
FCF/Share (TTM)
$11.94
ROIC (TTM)
19.6%
ROE (TTM)
24.4%
P/FCF
17.8x
EV/EBITDA
13.8x
FCF Yield
5.62%
Debt/Equity
0.13x
On a trailing twelve-month basis, RMD generates free cash flow per share of $11.94 alongside a ROIC of 19.6%, both central inputs for a DCF valuation. Its P/FCF ratio of 17.8x and FCF yield of 5.62% then frame how RMD is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of RMD?
ResMed Inc. currently generates $11.94 in free cash flow per share. At the current price of $214.29, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is RMD undervalued?
RMD trades at a P/FCF ratio of 17.8x with a free cash flow yield of 5.62%. This P/FCF is in a moderate range. However, whether RMD is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value RMD stock using DCF?
To perform a DCF valuation on ResMed Inc.: (1) Start with the trailing free cash flow per share ($11.94) as the base, (2) project future FCF growth over 5-10 years based on Medical - Devices industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting RMD's risk profile — with a debt-to-equity of 0.13x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to RMD?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For ResMed Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Medical - Devices trends, then discounting those amounts to today's dollars. RMD's ROIC of 19.6% reflects how efficiently the company converts invested capital into profit.
How does WACC affect RMD stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For RMD, with a debt-to-equity ratio of 0.13x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See RMD PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value RMD with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.