ResMed Inc. (RMD): A Bull Case Theory

Core Thesis - ResMed Inc. has established itself as a durable medtech franchise, despite its stock lagging behind the S&P 500 due to investor focus on AI and mega-cap tech [2][4] Financial Performance - As of October 13th, ResMed's share price was $273.01, with trailing and forward P/E ratios of 29.09 and 25.91 respectively [1] - The company has a ten-year median ROIC of 18%, a debt-to-equity ratio of 14%, and an earnings yield around 4%, indicating strong financial discipline [2] - Revenue has compounded at approximately 12% historically, significantly outperforming medtech peers [3] Market Position - ResMed commands a 60% market share in sleep therapy devices, with a substantial total addressable market of over two billion people globally suffering from sleep apnea, most of whom are undiagnosed [3] - Recent easing of supply chain constraints and Philips' recall issues have allowed ResMed to consolidate market share [4] Growth Prospects - Management anticipates mid-teens revenue growth and potential margin recovery, highlighting the company's operational resilience [4] - The current stock price of $272 is seen as a modest discount compared to an intrinsic valuation of approximately $290, making it an attractive option for patient investors [4] Investment Sentiment - ResMed's stock has appreciated roughly 22% since a previous bullish thesis in April 2025, with structural growth remaining strong [5] - While ResMed is not among the 30 most popular stocks among hedge funds, interest has increased from 34 to 38 hedge fund portfolios [6]