Should You Continue to Hold RMD Stock in Your Portfolio?

Core Insights - Resmed Inc. (RMD) is experiencing strong demand for its mask portfolio, including AirFit and AirTouch, while also focusing on strategic acquisitions to enhance its Residential Care Software business [1][8] - The company is expanding into international markets, which shows promising growth potential [1][9] Financial Performance - Over the past year, RMD stock has increased by 2.1%, outperforming the industry decline of 1.5% and the S&P 500 rise of 14.7% [2] - Resmed has a market capitalization of $36.25 billion and an earnings yield of 4.4%, compared to the industry's flat yield [2] - The company has consistently surpassed earnings estimates in the last four quarters, with an average surprise of 3.04% [2] Revenue Growth - In the first quarter of fiscal 2026, revenues from masks and other businesses grew by 12% year over year in the U.S., Canada, and Latin America, driven by resupply and new patient setups [3] - The acquisition of VirtuOx contributed additional revenues [3] - The Residential Care Software business saw a revenue increase of 6% on a reported basis and 5% in constant currency in the same quarter, supported by strong performances from MEDIFOX DAN and MatrixCare [6] Product Innovation - Resmed is focused on expanding its mask portfolio through new product innovations, recently launching two new variants under the AirTouch F30i mask platform [4] - The new products aim to enhance the comfort and options available in the fabric-based mask offerings [4] Strategic Acquisitions - The company has made strategic acquisitions, such as MEDIFOX DAN and MatrixCare, to bolster its Residential Care Software revenues [5] - Resmed is integrating its Residential Care Software business into its broader organization as part of its 2030 operating model [6] International Expansion - Resmed is targeting high-growth international markets, including China, South Korea, India, Brazil, and Eastern Europe, to improve patient quality of life and reduce healthcare costs [9] - Combined sales in the U.S., Canada, Latin America, Europe, and Asia increased by 10% in the first quarter of fiscal 2026 [9] Challenges - The company faces macroeconomic challenges, including geopolitical instability and supply chain constraints, which could impact demand and operating costs [10] - The competitive landscape for sleep-disordered breathing (SDB) products is intense, with significant competition from companies like Philips BV and DeVilbiss Healthcare [11] Earnings Estimates - The Zacks Consensus Estimate for RMD's fiscal 2026 earnings per share has increased by 0.2% to $10.81, with revenue estimates at $5.57 billion, reflecting an 8.3% increase from the previous year [12]