We came across a bullish thesis on ResMed Inc. (RMD) on Substack by LongTermValue Research. In this article, we will summarize the bulls’ thesis on RMD. ResMed Inc. (RMD)'s share was trading at $223 as of April 2nd. RMD’s trailing and forward P/E were 26.33 and 21.79 respectively according to Yahoo Finance.

A doctor pointing to a graph representing the diagnosis of a patient's sleep apnea.

ResMed (RMD), a $32.5 billion healthcare equipment leader, specializes in medical devices for sleep disorders, particularly CPAP machines, and plays a critical role in treating chronic respiratory conditions like COPD. With a strong presence in home-based care, ResMed also integrates a SaaS-driven patient monitoring system, enhancing compliance and long-term treatment outcomes. The company has been gaining market share from competitor Philips, positioning itself as a dominant force in the sleep apnea and respiratory care market.

Despite macroeconomic concerns, ResMed continues to demonstrate resilience, supported by strong demand and pricing power. The company is trading at 23.3x forward earnings for 2025 and 21.2x for 2026, with a projected EPS growth of ~10% in 2026. Shares are currently 16% off their 30-day high and 26% below their all-time peak, reflecting broader market trends rather than company-specific weakness. While ResMed remains a high-quality business, its valuation is not as compelling as it was in late 2023 when shares traded near $150. A further pullback into a mid-to-high teens P/E range would present a more attractive buying opportunity, making ResMed a top candidate for long-term investors seeking exposure to the growing sleep and respiratory care market.

ResMed Inc. (RMD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held RMD at the end of the fourth quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of RMD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.

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