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ResMed: Fantastic Firm But Fantastically Overpriced

Mar. 03, 2022 5:55 AM ETResMed Inc. (RMD)BAX, DXCM, IDXX, PHG, RSMDF, ZBH1 Comment


  • ResMed is a great company operationally, with an attractive growth record for sales, profits, and cash flows.
  • Long term, the company will likely continue to do well, with recent growth coming in strong.
  • But shares ultimately look incredibly overpriced even if they are fairly valued relative to similar businesses.
  • Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Learn More »

Sleep apnea medical record chart

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The words 'medical' and 'technology' go together like the words 'chocolate' and 'pudding'. Using technology to address medical issues has long been an attractive area for companies to innovate in. Such innovations have created tremendous value for many of the parties involved. And the companies that

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This article was written by

Daniel Jones profile picture

Daniel is an avid and active professional investor.

He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more.

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.

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Comments (1)

RMD priced at 11x sales vs 10 year avg P/S of 5x.
P/E of 72x vs 10 year avg of 33x
Current valuation is roughly double its historical valuation. In my opinion, the growth prospects are actually lower now as much of the market has been addressed.
EPS growth has been roughly flat last 3 years. $2.80, $4.20, $3.20 last 3 yrs). Not sure about paying 72 P/E for that snd the Phillips recall and Covid ventilator sales were one-time events that boosted sales and EPS, that are now ending.
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