ResMed Inc.
ResMed Inc. Fundamental Analysis
ResMed Inc. (RMD) shows strong financial fundamentals with a PE ratio of 25.41, profit margin of 27.53%, and ROE of 24.81%. The company generates $5.4B in annual revenue with moderate year-over-year growth of 9.84%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 88.3/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze RMD's fundamental strength across five key dimensions:
Efficiency Score
ExcellentRMD demonstrates superior asset utilization.
Valuation Score
WeakRMD trades at a premium to fair value.
Growth Score
ExcellentRMD delivers strong and consistent growth momentum.
Financial Health Score
ExcellentRMD maintains a strong and stable balance sheet.
Profitability Score
ExcellentRMD achieves industry-leading margins.
Key Financial Metrics
Is RMD Expensive or Cheap?
P/E Ratio
RMD trades at 25.41 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RMD's PEG of 7.33 indicates potential overvaluation.
Price to Book
The market values ResMed Inc. at 5.97 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 18.36 times EBITDA. This signals the market has high growth expectations.
How Well Does RMD Make Money?
Net Profit Margin
For every $100 in sales, ResMed Inc. keeps $27.53 as profit after all expenses.
Operating Margin
Core operations generate 33.81 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $24.81 in profit for every $100 of shareholder equity.
ROA
ResMed Inc. generates $17.47 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
ResMed Inc. generates strong operating cash flow of $1.91B, reflecting robust business health.
Free Cash Flow
ResMed Inc. generates strong free cash flow of $1.78B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.21 in free cash annually.
FCF Yield
RMD converts 4.75% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
25.41
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
7.33
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.97
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.97
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.25
vs 25 benchmark
ROA
Return on assets percentage
0.17
vs 25 benchmark
ROCE
Return on capital employed
0.25
vs 25 benchmark
How RMD Stacks Against Its Sector Peers
| Metric | RMD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 25.41 | 29.43 | Better (Cheaper) |
| ROE | 24.81% | 800.00% | Weak |
| Net Margin | 27.53% | -20145.00% (disorted) | Strong |
| Debt/Equity | 0.16 | 0.30 | Strong (Low Leverage) |
| Current Ratio | 3.06 | 4.64 | Strong Liquidity |
| ROA | 17.47% | -17936.00% (disorted) | Strong |
RMD outperforms its industry in 5 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews ResMed Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
71.22%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
121.66%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
114.79%
Industry Style: Defensive, Growth, Innovation
High Growth