Medical - Instruments & Supplies · NYSE
Current Price
$211.93
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on ResMed Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. The company operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME)to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal. It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; and HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies. The company markets its products primarily to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force in approximately 140 countries. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.
ROIC (TTM)
19.8%
ROE (TTM)
24.8%
FCF Yield
5.79%
Based on trailing twelve-month data, RMD shows a free cash flow per share of N/A and a ROIC of 19.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.79% are important context metrics when evaluating RMD's stock valuation relative to peers.
The intrinsic value of RMD depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether RMD is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $211.93. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on ResMed Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Medical - Instruments & Supplies industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting RMD's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
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 Medical - Instruments & Supplies will produce over the next 5-10 years, then discounting those amounts to today's dollars. RMD's ROIC of 19.8% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For RMD, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
