Current Price
$194.78
PE Ratio (TTM)
18.8x
Intrinsic Value
$261.26
+25.4% 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 PE valuation
A base case PE valuation for RMD estimates a fair value of about $261.26 per share, against a current price of $194.78. The model assumes 11.2% annual earnings growth, a 19x target PE multiple, and a 10% discount rate.
Intrinsic Value
$261.26
Margin of safety
+25.4%
Expected annual return
+6.0%
Base case assumptions: 11.2% annual earnings growth, 19x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the RMD PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for ResMed Inc. respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
18.8x
PEG Ratio
1.18
Earnings Yield
5.33%
ROE (TTM)
24.4%
Revenue/Share (TTM)
$37.81
Dividend Yield
1.23%
Debt/Equity
0.13x
Frequently Asked Questions
What is the PE ratio of RMD?
The trailing twelve-month PE ratio of RMD reflects how much investors pay per dollar of ResMed Inc.'s earnings. This metric is most useful when compared to Medical - Devices peers and the company's own historical range.
Is RMD overvalued based on PE ratio?
RMD's PE of 18.8x combined with a PEG ratio of 1.18 provides a growth-adjusted perspective. A PEG near 1.0 suggests the PE ratio is reasonably justified by the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Medical - Devices, a DCF analysis may be more appropriate.
How do I value RMD stock using PE ratio?
To value ResMed Inc. using PE: (1) Compare the current PE (18.8x) against the Medical - Devices median to assess relative pricing, (2) check the PEG ratio (1.18) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of RMD?
RMD's PEG ratio is 1.18, calculated by dividing the PE ratio (18.8x) by the expected earnings growth rate. A PEG near 1.0 suggests the stock is fairly priced relative to growth. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for RMD stock valuation?
PE ratio gives a quick relative read — how RMD is priced versus Medical - Devices peers. DCF provides an absolute value based on projected free cash flows. For RMD, with a strong ROE of 24.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See RMD DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Healthcare valuationsP/E and DCF value RMD with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic 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.