ResMed Inc. (RMD) Stock Valuation — PE Analysis
Medical - Instruments & Supplies · NYSE
Current Price
$225.98
PE Ratio (TTM)
21.6x
Intrinsic Value
$272.74
+17.1% margin of safety
COMPETITIVE MOAT
↑Strong Brand and Patient Loyalty
ResMed's established brand in sleep apnea devices fosters significant patient trust and loyalty. This makes it difficult for new entrants to displace their installed base.
↑Data Network Effects in Software
ResMed's connected devices generate valuable patient data. This data can be used to improve algorithms and personalize treatment, creating a feedback loop that enhances their offerings.
↑Ecosystem Lock-in with Integrated Solutions
The company offers a comprehensive ecosystem of devices, masks, and software. This integration creates switching costs for healthcare providers and patients invested in their platform.
INVESTMENT RISKS
↓Regulatory Scrutiny and Compliance
The medical device industry faces stringent regulations. Changes in compliance requirements or enforcement could impact ResMed's product development and market access.
↓Supply Chain Vulnerabilities
Reliance on global supply chains for components can expose ResMed to disruptions. Geopolitical events or manufacturing issues could impact production and availability.
↓Reimbursement Rate Fluctuations
Changes in healthcare reimbursement policies by payers can affect the affordability and adoption of ResMed's devices. This could impact sales volumes and profitability.
Base case
RMD base case PE valuation
At a current price of $225.98, the base case PE valuation puts RMD fair value near $272.74 per share. That figure assumes 9.5% yearly earnings growth, a target PE multiple of 21.46x, and a 10% discount rate.
Intrinsic Value
$272.74
Margin of safety
+17.1%
Expected annual return
+3.8%
Base case assumptions: 9.5% annual earnings growth, 21.46x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-07.
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)
21.6x
PEG Ratio
2.32
Earnings Yield
4.66%
ROE (TTM)
23.9%
Revenue/Share (TTM)
$39.07
Dividend Yield
1.09%
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 - Instruments & Supplies peers and the company's own historical range.
Is RMD overvalued based on PE ratio?
RMD's PE of 21.6x combined with a PEG ratio of 2.32 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Medical - Instruments & Supplies, 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 (21.6x) against the Medical - Instruments & Supplies median to assess relative pricing, (2) check the PEG ratio (2.32) 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 2.32, calculated by dividing the PE ratio (21.6x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. 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 - Instruments & Supplies peers. DCF provides an absolute value based on projected free cash flows. For RMD, with a strong ROE of 23.9%, 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 2026-10-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.