ResMed: A Significant Upside Despite The Perceived Risk

First Principles Partners 2.04K Followers Follow Summary ResMed has de-rated from 30x to under 21x earnings despite 17% EPS growth, driven by narrative rather than fundamentals. Recurring mask and consumables revenue, now 42% of the sleep and breathing segment, is underappreciated and grew 13% last year. Two major risks—sleep apnea pill and reimbursement—are less material for RMD than feared; Philips' US return poses the most credible threat. I target $280–$300 per share (21–29% upside), assuming 6% core growth and a low-twenties multiple as mask attach holds. Anetlanda/iStock via Getty Images Investment Thesis ResMed ( RMD ) closed at $290.65 on 22 August 2025. Today the stock trades around $232 even though non-GAAP earnings per share increased 17% to $11.17 over the fiscal year between those two dates. A year ago, investors were paying roughly This article was written by First Principles Partners 2.04K Followers Follow First Principles Partners is an equity research analyst specializing in technology, innovation, and sustainability investment. My unique approach, "First Principles," involves breaking down complex problems to their most basic elements in terms of financial and technology, enabling me to uncover overlooked investment opportunities.With a strong background in investment, private equity and venture capital, I have a proven track record of delivering strong returns for readers. Articles on Seeking Alpha focus on emerging technologies, sustainable investing, and the intersection of innovation and finance. I am passionate about sharing insights with a wider audience and learning from fellow investors. Together, we can drive positive change and contribute to a more sustainable and innovative world. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.