ResMed Inc. (RMD) Stock Valuation — DCF Analysis
Medical - Devices · NYSE
Current Price
$194.78
Intrinsic Value
$268.29
+27.4% margin of safety
COMPETITIVE MOAT
↑Strong Brand & Patient Loyalty
ResMed's established brand in sleep apnea and respiratory care fosters significant patient loyalty. This loyalty translates into recurring revenue from consumables and device upgrades, creating a sticky customer base.
↑Data & Connectivity Ecosystem
ResMed's connected devices generate valuable patient data. This data fuels product development and offers insights for healthcare providers, creating a network effect that enhances the value of their offerings.
↑Acquisition of Innovative Therapies
The acquisition of Noctrix Health and its TOMAC therapy demonstrates ResMed's strategy to integrate novel treatments. This expands their clinical portfolio and addresses unmet needs in sleep health.
INVESTMENT RISKS
↓Competition in Sleep Apnea Market
The sleep apnea market is competitive, with established players and emerging technologies. ResMed faces ongoing pressure to innovate and maintain market share against rivals.
↓Regulatory Scrutiny & Reimbursement
Changes in healthcare regulations and reimbursement policies can impact ResMed's profitability. Navigating these complex systems is crucial for sustained revenue growth.
↓Dependence on Key Markets
ResMed's reliance on specific geographic markets and healthcare systems presents a risk. Economic downturns or shifts in these regions could affect sales performance.
Base case
RMD base case valuation
A base case discounted cash flow model for RMD estimates an intrinsic value of about $268.29 per share, against a current price of $194.78. The model assumes 11.3% annual free cash flow growth, a 10.0% discount rate, and a 16x exit multiple.
Intrinsic Value
$268.29
Margin of safety
+27.4%
Expected annual return
+6.6%
Base case assumptions: 11.3% annual growth, 10.0% discount rate, 16x exit multiple, 5 year projection. Data as of 2026-06-12.
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)
$11.98
ROIC (TTM)
19.6%
ROE (TTM)
24.4%
P/FCF
16.1x
EV/EBITDA
13.0x
FCF Yield
6.21%
Debt/Equity
0.13x
Based on trailing twelve-month data, RMD shows a free cash flow per share of $11.98 and a ROIC of 19.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 16.1x and FCF yield of 6.21% are important context metrics when evaluating RMD's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of RMD?
ResMed Inc. currently generates $11.98 in free cash flow per share. At the current price of $194.78, 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 16.1x with a free cash flow yield of 6.21%. 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 ($11.98) 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% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
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 13.0x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.