ResMed Shares: A Closer Look at the Current Situation
ResMed Inc (ASX: RMD) shares have shown a slight upward trend today, despite the broader market’s performance. On Friday, the company closed at $27.64, and by Tuesday afternoon, the stock was trading at $27.91, reflecting a 1% increase. This movement is notable, especially when compared to the S&P/ASX 200 Index (ASX: XJO), which has seen a 0.3% decline at the same time.
However, when considering the longer-term view, ResMed shares have experienced a significant drop of 28.2% over the past year, far outpacing the 0.2% growth of the benchmark index. This raises an important question: should investors consider buying, holding, or selling ResMed shares?
Expert Analysis on ResMed’s Outlook
MPC Markets’ Mark Gardner recently provided insights into the outlook for ResMed, an ASX healthcare stock. He highlighted that ResMed remains a high-quality respiratory care business. However, he also noted that concerns about the impact of GLP-1 weight loss drugs have influenced investor sentiment. Despite this, recent analysis suggests that the large, undiagnosed sleep apnoea market still offers substantial potential for device demand.
Gardner pointed out that while the company benefits from a strong mask and device portfolio, there was disappointment among investors regarding the unchanged fiscal year 2026 outlook following a strong third-quarter result. Based on these factors, Gardner issued a “hold” recommendation on ResMed shares, balancing the quality of the franchise against near-term uncertainties related to margins, competition, and investor expectations.
Recent Financial Performance
ResMed released its third-quarter results on 1 May, which were discussed by Gardner. The highlights included revenue of US$1.43 billion, representing an 11% year-on-year increase, or 8% in constant currency. The quarter also saw operating cash flow of US$554 million, with US$262 million returned to shareholders through share repurchases and dividends.
ResMed pays dividends on a quarterly basis. CEO Mick Farrell commented on the results, stating that they reflect the continued strength of the global business, driven by ongoing demand for market-leading products and disciplined execution of the company’s strategy. Farrell added that these results highlight the momentum behind their strategy and the progress being made in shaping the future of sleep health, breathing health, and healthcare in the home.
Despite the positive results, ResMed shares closed down 7.6% on the day of the release, indicating that high expectations may not have been fully met.
Investment Considerations
With ResMed shares down 28% over the past year, some investors may be wondering if now is a good time to buy the dip. However, it’s essential to consider various factors before making any investment decisions. For instance, Motley Fool investing expert Scott Phillips recently highlighted what he believes are the 5 best stocks for investors to buy right now, and ResMed was not among them.
Investors should carefully evaluate their options and consider the long-term potential of each stock. It’s also crucial to understand the risks involved and to make informed decisions based on personal financial goals and risk tolerance.
Additional Resources
For those interested in learning more about investing in ASX shares, there are several resources available. These include guides on how to invest in ASX shares when you’re unsure of what to buy, recommendations for where to invest $2,000 in ASX 200 shares in June, and insights into the best ASX shares to buy now for FY27.
Additionally, there are discussions on whether CSL and ResMed shares are good buys at their 52-week lows, along with other relevant information.
Final Thoughts
As with any investment, it’s important to conduct thorough research and consider all available information. While ResMed has shown resilience and continues to operate in a growing market, the current landscape presents both opportunities and challenges. Investors should weigh these factors carefully and consult with financial advisors if needed.
