ResMed (RMD) Stock Forecast & Price Target

ResMed is viewed favorably because its core sleep apnea franchise still benefits from a vast underdiagnosed market, with only 20% diagnosis in the U.S. and 424m people estimated to have severe sleep apnea globally, leaving meaningful room for durable device, mask, and SaaS growth. Management’s FY27 guidance of 5%-7% core constant-currency growth and $12.00-$12.25 EPS appears credible given strong RoW device growth of 9.0% YoY, mask growth of 12.0% in RoW, modest pricing power, productivity gains, and accretive share repurchases supported by a net cash balance of $810m. Concerns around Astral, U.S. competition, and GLP-1s look manageable, while recurring revenues, high gross margins around 62.3%, and continued capital returns support an attractive long-term fundamental outlook.

ResMed is facing a fundamentally less attractive setup because 4Q26 revenue was only in line while earnings and adjusted gross margin were softer than expected, with margin compression tied to inflation in electronic components and freight. The outlook is further pressured by a $41.9 million Astral recall provision, a $75 million revenue hit and roughly 130 bps drag in FY27, plus a 50 bps FX headwind, even as FY27 revenue guidance of $5.75-5.85 billion came in below pre-call expectations. Weakness in the Americas, where U.S. devices and masks both missed consensus, underscores execution risk in its largest market and limits confidence that growth will offset these cost and recall burdens.