ResMed (RMD): 10/10, world leader in connected sleep therapy
2026-06-23 · By Lubin Danilo, founder of Lubin Investment
ResMed is the world leader in CPAP devices for sleep apnea and connected respiratory monitoring. It scores 10/10 in our screener as of June 23, 2026, with a P/FCF of 16.7×. Its current price of $188.45 is slightly below our buy target of $195.55 — making it one of the few 10/10 stocks currently in buy territory.
ResMed: global monopoly in connected sleep apnea therapy
ResMed Inc. (NYSE: RMD) is the world leader in CPAP (Continuous Positive Airway Pressure) devices — masks and machines treating sleep apnea. Its machines, remote monitoring software (myAir, AirView) and accessories serve 900M+ patients in 140 countries. Its historic competitor Philips Respironics suffered a massive recall in 2021 due to toxic materials — accelerating market share transfer to ResMed.
Screener fundamentals as of June 23, 2026: 10/10
| Criterion | Result | Status |
|---|---|---|
| Net margin | ✅ Pass | Pass |
| Revenue growth (5Y) | ✅ Pass | Pass |
| FCF/share growth (5Y) | ✅ Pass | Pass |
| Share dilution | ✅ Pass | Pass |
| FCF margin | ✅ Pass | Pass |
| Margin expansion | ✅ Pass | Pass |
| ROIC | ✅ Pass | Pass |
| Debt | ✅ Pass | Pass |
| Cash conversion | ✅ Pass | Pass |
| DSO | ⚠ Warn (near threshold) | Warn |
| P/FCF: 16.7× | ✅ Pass | Pass |
| Valuation ($188 vs $195 target) | ✅ Pass | BUY ZONE |
Strong signal: price below our buy target
As of June 23, 2026, ResMed trades at $188.45 vs our buy target of $195.55 (FCF/share × 7×). The price is 3.6% below target — technically in buy territory by our screener. This is rare for a 10/10: most perfect-scoring stocks trade 50-200% above our target. RMD has corrected from its peak (~$260) due to concerns about GLP-1 drugs (Ozempic, Wegovy) impacting the sleep apnea market — fears that treating obesity would reduce CPAP patients.
The sleep apnea thesis: much more than a weight issue
The GLP-1 fear is real but exaggerated per ResMed and clinical data. Of 936M people with sleep apnea globally, only a subset is obese — a significant portion has structural apnea (airway anatomy, genetics) unrelated to weight. Additionally, the market is massively under-diagnosed: only ~30% of cases are detected. GLP-1s may treat some patients but won't eliminate the market — they may even expand it by improving overall patient health.
FAQ
Why has ResMed declined despite strong results?
RMD's correction is driven by fear that GLP-1 drugs (Ozempic, Wegovy) will reduce sleep apnea incidence. Investors worry about long-term market shrinkage. ResMed's financial results remain very strong — the correction is 'narrative' rather than fundamental.
Did ResMed benefit from the Philips recall?
Massively. The 5.5M device Philips Respironics recall in 2021 (potentially carcinogenic polyurethane foam) accelerated market share transfer to ResMed. RMD gained millions of new patients and consolidated leadership at 60%+ of global CPAP market share.
Is ResMed's subscription model truly recurring?
Yes. ResMed earns on hardware (CPAP machines, masks) plus recurring accessories (masks replaced every 3 months) and software licenses (myAir, AirView for providers). Software and accessories represent a growing share of revenue — classic razor-and-blades model.
What is ResMed's main risk?
1. Long-term GLP-1 impact — monitor via clinical data. 2. Asian competition on low-end hardware (China). 3. Insurer pressure on CPAP device reimbursement. These are real but manageable risks for such a technologically well-positioned leader.
Voir l'analyse RMD sur Lubin Investment
About the author
Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I have analyzed stocks through their fundamentals for several years and invest my own money with this method. I codified it into a tool that judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).