ResMed (NYSE:RMD) Posts Quarterly Earnings Results, Beats Estimates By $0.24 EPS

ResMed (NYSE:RMD) issued its earnings results on Thursday. The medical equipment provider reported $2.91 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.67 by $0.24, FiscalAI reports. The company had revenue of $1.41 billion during the quarter, compared to analyst estimates of $1.39 billion. ResMed had a return on equity of 25.90% and a net margin of 27.79%. The firm’s quarterly revenue was up 5.9% on a year-over-year basis. During the same quarter last year, the business posted $2.55 EPS.

Here are the key takeaways from ResMed’s conference call:

• Strong Q1 performance: Revenue rose 7% on a core constant-currency basis to approximately $1.4 billion, while non-GAAP EPS increased 14% to $2.91, supported by demand across sleep devices, masks, and residential-care software.
• Gross margin expanded 50 basis points to 62.5% as procurement, manufacturing, and distribution productivity gains more than offset foreign-exchange and inflationary pressures. Management maintained its expectation for low-double-digit-basis-point gross-margin expansion for fiscal 2027.
• ResMed reiterated fiscal 2027 guidance for 5%-7% core constant-currency revenue growth and $12-$12.25 in non-GAAP EPS, but said the most likely outcome remains the midpoint. Growth could be helped by pricing and marketing initiatives, while France’s fleet refresh will create a back-half headwind and inflation remains a risk.
• New ecosystem initiatives are showing encouraging early traction, including fabric masks that have delivered a reported 6% adherence improvement, SmartComfort’s 4.3% increase in 30-day compliance, and more than 2.1 million inquiries to the Dawn generative-AI sleep coach.
• The company returned more than $1 billion to shareholders in Q1, including $936 million in share repurchases, and expects to return at least $1.85 billion during fiscal 2027. ResMed also highlighted continued investment in U.S. and global manufacturing capacity, though ramp-up costs will weigh on margins in coming quarters.

ResMed Price Performance

NYSE:RMD opened at $230.76 on Friday. The firm’s fifty day moving average is $231.87 and its two-hundred day moving average is $225.43. The firm has a market cap of $32.45 billion, a price-to-earnings ratio of 21.02, a PEG ratio of 1.55 and a beta of 0.75. The company has a debt-to-equity ratio of 0.06, a quick ratio of 2.42 and a current ratio of 3.10. ResMed has a one year low of $180.26 and a one year high of $277.67.

ResMed Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 17th. Shareholders of record on Thursday, November 12th will be issued a $0.66 dividend. This represents a $2.64 annualized dividend and a yield of 1.1%. The ex-dividend date of this dividend is Thursday, November 12th. ResMed’s dividend payout ratio is presently 25.31%.

Insider Activity

In related news, CEO Michael J. Farrell sold 4,991 shares of the firm’s stock in a transaction dated Friday, August 7th. The stock was sold at an average price of $205.69, for a total transaction of $1,026,598.79. Following the sale, the chief executive officer directly owned 466,256 shares of the company’s stock, valued at $95,904,196.64. This trade represents a 1.06% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, General Counsel Michael J. Rider sold 400 shares of ResMed stock in a transaction that occurred on Friday, October 23rd. The shares were sold at an average price of $255.00, for a total value of $102,000.00. Following the transaction, the general counsel owned 12,318 shares of the company’s stock, valued at approximately $3,141,090. This represents a 3.15% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 24,343 shares of company stock valued at $5,396,098 in the last quarter. 0.58% of the stock is currently owned by company insiders.

Key Headlines Impacting ResMed

Here are the key news stories impacting ResMed this week:

• Positive Sentiment: Quarterly results exceeded expectations. ResMed reported fiscal Q1 2027 adjusted earnings of $2.91 per share versus the $2.67 consensus estimate, while revenue rose 5.9% year over year to $1.41 billion, ahead of the $1.39 billion forecast. ResMed fiscal first-quarter results
• Positive Sentiment: Profitability and demand trends improved. Sustained demand for sleep devices, productivity gains and gross-margin expansion supported the earnings beat. EPS increased from $2.55 in the year-ago quarter, and ResMed reported a 26.94% net margin. ResMed earnings and margin growth
• Positive Sentiment: Analysts raised price targets. RBC increased its target from $262 to $288 and assigned an “outperform” rating. KeyCorp raised its target from $267 to $277 with an “overweight” rating, while Wells Fargo lifted its target from $215 to $250 and maintained “equal weight.” Citigroup raised its target from $240 to $270 but retained a “neutral” rating. Analyst target changes
• Neutral Sentiment: ResMed declared a quarterly dividend of $0.66 per share, or $2.64 annualized, representing an approximately 1.1% yield. The dividend supports shareholder returns but is unlikely to be the primary near-term stock catalyst.
• Negative Sentiment: Full-year guidance was unchanged. The lack of an outlook increase may have disappointed investors who expected the earnings beat and improving margins to result in raised expectations. The neutral ratings from Citigroup and Wells Fargo may also limit the impact of the higher price targets. ResMed maintains prior guidance

Wall Street Analyst Weigh In

Several analysts have weighed in on RMD shares. UBS Group reiterated a “buy” rating and set a $300.00 price target on shares of ResMed in a research note on Tuesday, July 21st. Weiss Ratings upgraded ResMed from a “hold (c)” rating to a “hold (c+)” rating in a research note on Thursday, October 8th. Rothschild & Co Redburn assumed coverage on ResMed in a research note on Wednesday, August 19th. They issued a “neutral” rating and a $230.00 price objective for the company. KeyCorp lifted their target price on ResMed from $267.00 to $277.00 and gave the stock an “overweight” rating in a report on Friday. Finally, Royal Bank Of Canada upped their target price on ResMed from $262.00 to $288.00 and gave the company an “outperform” rating in a research report on Friday. Seven investment analysts have rated the stock with a Buy rating and ten have assigned a Hold rating to the company’s stock. According to MarketBeat.com, ResMed has an average rating of “Hold” and a consensus price target of $253.69.

About ResMed

ResMed Inc is a medical equipment and software company that develops solutions for sleep-disordered breathing, respiratory conditions and other chronic diseases. The company is best known for its positive airway pressure (PAP) devices used to treat obstructive sleep apnea, along with masks, accessories and related patient support services.

ResMed also provides cloud-connected health technology, including remote-monitoring platforms and software used by healthcare providers, medical equipment suppliers and care organizations.