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Based in San Diego, California, ResMed Inc. (RMD) develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. Valued at a market cap of $33.6 billion, the company primarily provides generators, masks, and related accessories for the treatment of sleep-disordered breathing (SDB) and other respiratory disorders. It is scheduled to announce its fiscal Q2 earnings results on Wednesday, Jan. 22.
Before this event, analysts projected the medical instruments provider to report a profit of $2.29 per share, up 21.8% from $1.88 per share in the year-ago quarter. Moreover, the company has a promising trajectory of consistently beating Wall Street's bottom-line estimates in the last four quarters. In Q1 2025, RMD’s adjusted EPS of $2.20 outpaced the consensus estimates by 8.4%.
For fiscal 2025, analysts expect RMD to report an EPS of $9.35, up 21.1% from $7.72 in fiscal 2024. Moreover, in fiscal 2026, EPS is expected to grow 9.6% year-over-year to $10.25.
Shares of RMD have rallied 33% over the past 52 weeks, outpacing both the S&P 500 Index's ($SPX) 23.7% gain and the Health Care Select Sector SPDR Fund’s (XLV) marginal decline over the same period.
RMD’s shares closed up more than 7% following its solid Q1 earnings release on Oct. 24. The company’s revenue climbed 11.1% year-over-year to $1.2 billion and outpaced the consensus estimates, driven by robust revenue growth across all of its product and geographic segments. Moreover, a 324-bps annual gross margin expansion and a 432-bps adjusted operating margin expansion from the year-ago quarter, fueled by ResMed’s focus on operational excellence led to a notable 34.1% year-over-year increase in its adjusted EPS to $2.20. The bottom line also exceeded Wall Street’s expectations.
Wall Street analysts are moderately optimistic about ResMed’s stock, with a "Moderate Buy" rating overall. Among 14 analysts covering the stock, six recommend "Strong Buy," seven suggest "Hold," and one indicates a “Strong Sell” rating. The mean price target for RMD is $253.10, which indicates a modest 10.8% potential upside from the current levels.
