ResMed Projects 10.8% EPS Growth Amid Market Challenges

ResMed Inc. (RMD) anticipates a 10.8% increase in EPS, signaling strong demand for its products. Analysts rate it a 'Moderate Buy' with a 24.3% upside potential in stock price. Investors should consider the implications of competition from GLP-1 drugs.

Date: 14-04-2025

AI Rating: 7

ResMed Inc. is gearing up for its fiscal Q3 earnings report and anticipates a profit of $2.36 per share, reflecting a solid 10.8% growth compared to the previous year. This aligns with the recently reported adjusted EPS of $2.43, which exceeded consensus estimates by 5.7%. Such performance highlights strong demand for ResMed's offerings, particularly in sleep and respiratory products, as more patients opt for at-home healthcare solutions. Given this momentum, the expected EPS for the current year stands at $9.47, representing a notable 22.7% increase from $7.72 in 2024. Furthermore, a projected 8.6% EPS growth for fiscal 2026 reinforces positive expectations for continued revenue growth.

Analyzing the Impact of Profit Margins and Competition ResMed's gross margin has increased to 59.2%, indicating improved profit efficiency. Despite a recent decline of 8.3% following their Q2 results, the overall growth trajectory remains strong. However, looming competition from GLP-1 drugs, which have been approved for obstructive sleep apnea treatment, raises concerns that could dampen long-term demand for ResMed’s core products. Analysts maintain a 'Moderate Buy' outlook on the stock, with a price target suggesting a 24.3% upside potential. This indicates confidence in the company's ability to navigate market challenges while capitalizing on operational strengths.

Stocks: RMD