Core Insights - ResMed Inc reported second-quarter fiscal 2026 adjusted earnings of $2.81, exceeding the consensus estimate of $2.72 [1] - Quarterly sales rose 11% year over year to $1.42 billion, surpassing the consensus estimate of $1.396 billion [1] - Sales increased 9% on a constant currency basis, driven by higher demand for sleep devices, masks, and accessories [1] - Residential Care Software revenue grew by 5% on a constant currency basis [1] Product Development - In December 2025, the FDA cleared ResMed's Personalized Therapy Comfort Settings (PTCS) for marketing as Smart Comfort, the first AI-enabled medical device for obstructive sleep apnea patients [2] - Smart Comfort is set to launch in early 2026 in a limited U.S. beta version for new users of the myAir app, with a broader rollout planned later in 2026 [3] Financial Performance - Gross margin increased by 320 basis points to 61.8%, driven by manufacturing and logistics efficiencies [3] - Adjusted gross margin rose by 310 basis points to 62.3% [3] - Adjusted operating income increased 19% to $517.2 million [4] Future Outlook - ResMed anticipates revenue growth at a high single-digit rate over the next five years, with earnings expected to outpace revenue growth [5] Analyst Reactions - Analysts from William Blair support the bull thesis for ResMed, projecting strong double-digit EPS growth of +15% this year [6] - Stifel raised the price forecast from $260 to $265, while Wells Fargo increased it from $265 to $270, and Piper Sandler from $270 to $275 [7] - ResMed shares were down 2.33% at $251.62 as of the last check on Friday [7]

Core Insights - Resmed reported strong financial results for the quarter ended December 31, 2025, with an 11% year-over-year revenue growth, driven by high demand for sleep and respiratory care devices and the expansion of its digital health ecosystem [3][5][21]. Financial Performance - Revenue for the quarter reached $1.422 billion, an increase of 11% compared to $1.282 billion in the same quarter of the previous year, with a 9% increase on a constant currency basis [4][5][21]. - Gross margin improved by 320 basis points to 61.8%, while non-GAAP gross margin increased by 310 basis points to 62.3%, attributed to manufacturing efficiencies and cost improvements [5][8][21]. - Income from operations rose by 18% to $491.7 million, with non-GAAP income from operations increasing by 19% to $517.2 million [4][5][21]. - Net income for the quarter was $392.6 million, a 14% increase from $344.6 million, with non-GAAP net income rising by 15% to $411.5 million [5][20]. - Diluted earnings per share increased by 15% to $2.68, while non-GAAP diluted earnings per share rose by 16% to $2.81 [5][20]. Operational Highlights - The company continues to invest in innovation to enhance its digital health capabilities and expand access to care [4][8]. - Operating cash flow for the quarter was $340 million, reflecting strong operational performance [5][17]. - Resmed declared a quarterly cash dividend of $0.60 per share, with a record date of February 12, 2026 [8][9]. Market Performance - Revenue growth was driven by a 11% increase in the U.S., Canada, and Latin America, while Europe, Asia, and other markets saw a 6% growth on a constant currency basis [8][21]. - The company reported a 5% increase in Residential Care Software revenue on a constant currency basis [8][21]. Strategic Initiatives - Resmed received FDA clearance for an AI-enabled digital medical device aimed at personalizing CPAP comfort settings, enhancing patient adherence [8]. - The company presented its long-term growth opportunities and leadership in digital sleep and respiratory health at the J.P. Morgan Healthcare Conference [8].

Core Viewpoint - The U.S. stock market experienced a decline primarily due to Nvidia's ban on H200 AI chips in China, which negatively impacted major technology stocks and bank earnings [2][10]. Market Overview - The three major U.S. stock indices fell on January 14, 2026, with Nvidia's decline leading the way, affecting other technology stocks [2]. - Major banks like Citigroup and Wells Fargo reported disappointing fourth-quarter results, contributing to the market's downturn [2]. Investment Strategy - Investors are advised to favor low-leverage stocks over high-growth technology stocks to mitigate risks associated with high-debt companies [3][10]. - Recommended companies include REV Group (REVG), TechnipFMC (FTI), Resmed (RMD), Zurn Elkay Water Solutions (ZWS), and SEI Investments (SEIC), all of which exhibit low leverage and solid growth prospects [3][10]. Significance of Low-Leverage Stocks - Leverage refers to borrowing capital for operations and expansion, typically through debt financing, which can pose risks if not managed properly [5][6]. - Companies with excessive reliance on debt financing may face significant losses during economic downturns, making low-leverage stocks a safer investment choice [6][7]. Debt Analysis - The debt-to-equity ratio is a key metric for assessing a company's financial risk, with lower ratios indicating better solvency [8]. - Investors should focus on stocks with solid earnings growth and low debt-to-equity ratios, especially during earnings seasons [8][10]. Stock Recommendations - **REV Group (REVG)**: Reported a 11.1% year-over-year increase in net sales to $664.4 million and a 62.7% surge in adjusted earnings per share [14][15]. - **TechnipFMC (FTI)**: Awarded a significant contract by BP, with a projected revenue increase of 6.6% for 2026 [16][17]. - **Resmed (RMD)**: Received FDA clearance for an AI-enabled medical device, with an expected 8.4% revenue growth for 2026 [18][19]. - **Zurn Elkay Water Solutions (ZWS)**: Recognized as one of America's Most Responsible Companies, with a projected revenue increase of 5.3% for 2026 [20][21]. - **SEI Investments (SEIC)**: Completed multiple client projects, with a forecasted revenue growth of 9.3% for 2026 [22][23].

Market Overview - The three major U.S. stock indices experienced a decline on December 29, 2025, primarily driven by a drop in large technology shares such as Oracle, Nvidia, and Palantir Technologies, which dampened expectations for a "Santa Claus rally" [1][10] Investment Strategy - Investors are advised to favor low-leverage stocks over high-growth technology stocks due to the recent market sell-off, with companies like Engie SA, Hamilton Insurance Group, Hecla Mining, Resmed, and Siemens Energy being recommended as safer options [2][10] - Low-leverage stocks are characterized by lower financial risk, making them more stable during market volatility [6][9] Low-Leverage Stocks - Leverage refers to the use of borrowed capital for business operations, but excessive reliance on debt can lead to significant losses, especially during economic downturns [4][5] - The debt-to-equity ratio is a key metric for assessing a company's financial risk, with a lower ratio indicating better solvency [7] Company Highlights - **Engie SA (ENGIY)**: Engie operates in the power and energy services sector and recently announced the full commercial operation of its largest onshore wind project, which is expected to enhance its position in the wind energy market. The Zacks Consensus Estimate for 2025 earnings indicates a 28.5% improvement from the previous year [14] - **Hamilton Insurance Group (HG)**: The company reported a 16.5% increase in net premiums and significant improvement in operating earnings, with a Zacks Consensus Estimate suggesting a 20.8% revenue increase for 2025 [15][16] - **Hecla Mining (HL)**: As a leading silver producer, Hecla announced progress on its Polaris Exploration Project, with a Zacks Consensus Estimate indicating a 42.1% revenue increase and a 281.8% earnings improvement for 2025 [17][18] - **Resmed (RMD)**: Resmed received FDA clearance for an AI-enabled medical device aimed at improving CPAP therapy adherence, with a projected 8.4% sales growth for fiscal 2026 [19][20] - **Siemens Energy (SMNEY)**: The company focuses on renewable energy and plans to repurchase shares worth approximately $6.9 billion, with a Zacks Consensus Estimate indicating a 16.9% revenue increase and a 158.2% earnings improvement for fiscal 2026 [21][22]

Core Insights - Resmed has received FDA clearance for its Personalized Therapy Comfort Settings (PTCS), branded as Smart Comfort, set to launch in early 2026 for new users of the myAir app paired with the AirSense 11 device [1][9] - Smart Comfort is designed to enhance the user experience in CPAP therapy by utilizing AI and real-world sleep data to provide personalized comfort settings [2][5] Company Developments - Resmed's Smart Comfort is the first FDA-cleared AI-enabled medical device that recommends personalized comfort settings for patients with obstructive sleep apnea (OSA), which affects an estimated 61 million people in the U.S. [3][9] - The company currently has a market capitalization of $37.44 billion, with a projected 13.2% increase in fiscal 2026 earnings according to the Zacks Consensus Estimate [4] Product Features - Smart Comfort addresses common therapy issues such as comfort and mask fit, promoting long-term adherence to CPAP therapy by leveraging machine-learning algorithms and over 100 million nights of de-identified sleep data [5][6] - The device settings include features that ease users into therapy, adjust pressure gradually, and reduce pressure on exhalation, developed with clinical oversight and ethical data use [6][7] Market Outlook - The global sleep apnea device market is valued at $7.11 billion in 2025, with a projected compound annual growth rate of 7% through 2034, driven by the rising prevalence of sleep apnea and advancements in medical technology [11] - Resmed's recent initiatives, such as the launch of the Sleep Institute, aim to advance the science of sleep health and support policy decisions [12] Stock Performance - Following the announcement of Smart Comfort, Resmed's shares dropped 2.5%, closing at $250.04, but the product is expected to support a rebound in stock performance [3] - Year-to-date, Resmed shares have increased by 9.3%, outperforming the industry average of 3.2% [13]

Core Insights - Resmed has received FDA clearance for its AI-enabled medical device, Smart Comfort, aimed at improving CPAP therapy adherence for patients with obstructive sleep apnea (OSA) [1][2][4] Group 1: Product Overview - Smart Comfort is the first FDA-cleared device that recommends personalized comfort settings for CPAP therapy, launching in early 2026 in a limited U.S. beta version [2] - The device utilizes machine-learning algorithms based on over 100 million nights of de-identified sleep data to tailor comfort settings for users [3] - Smart Comfort aims to address common therapy issues such as comfort and mask fit, promoting long-term adherence to CPAP therapy [3] Group 2: Clinical and Market Impact - The FDA submission was supported by evidence showing that users whose comfort settings matched Smart Comfort recommendations had higher engagement and sustained therapy adherence compared to those using default settings [4] - OSA affects an estimated 61 million people in the U.S., projected to rise to nearly 77 million by 2050, highlighting a significant market opportunity for Resmed [5] - CPAP therapy is recognized as the gold standard treatment for sleep apnea, significantly reducing health risks associated with untreated OSA [5] Group 3: Benefits for Healthcare Providers - Smart Comfort streamlines user setup and follow-up for healthcare providers, allowing clinicians to focus more on clinical decision-making and patient support [6] - The device helps standardize comfort settings, enhancing user confidence that their therapy is personalized [6] Group 4: Company Vision and Commitment - Smart Comfort is part of Resmed's broader connected, personalized sleep-health ecosystem, which integrates AI and cloud-connected devices to enhance therapy efficacy [7] - Resmed is committed to responsible, data-driven innovation to improve sleep health and empower users [8]