ResMed Inc. (RMD): A Bull Case Theory

We came across a bullish thesis on ResMed Inc. on Best Anchor Stocks’s Substack. In this article, we will summarize the bulls’ thesis on RMD. ResMed Inc.'s share was trading at $257.61 as of January 29th. RMD’s trailing and forward P/E were 26.38 and 23.70 respectively according to Yahoo Finance.

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications to diagnose, treat, and manage respiratory disorders in the United States and internationally. RMD began in 1989 when Peter Farrell set out to treat sleep apnea, a condition that causes airway obstruction during sleep and affects hundreds of millions globally, degrading quality of life and contributing to cardiovascular issues and strained relationships.

Farrell’s solution—CPAP therapy—became the gold standard, delivering strong clinical results despite longstanding compliance challenges, as many patients resist sleeping with a mask. CPAP nonetheless enabled ResMed to build a durable razor-razorblade model, selling machines upfront and monetizing recurring mask replacements, ultimately creating a $5B+ sleep-therapy powerhouse. Yet CPAP adoption has historically been constrained by weak top-of-funnel conversion: tens of millions of U.S. adults likely have sleep apnea, but diagnosis rates remain low given historically cumbersome sleep-test requirements and limited patient awareness.

ResMed now believes the industry is at a major inflection point as wearables and recent FDA approvals make pre-screening more accessible, while GLP-1 drugs drive more patients to sleep doctors—expanding the funnel, though skeptics argue weight loss could reduce CPAP eligibility and long-term value. Post-diagnosis hurdles also persist, but ResMed has differentiated itself through a powerful digital ecosystem—myAir, AirView, and Brightree—strengthening adherence, streamlining reimbursement, and reinforcing its influence over doctors and DME suppliers.

Its position was further cemented when Philips’ 2021 recall effectively granted ResMed a near-monopoly in new CPAP sales, accelerating installed-base growth and recurring revenue potential. Despite excellent historical ROICs and strong strategic execution, the emerging threat comes from Apnimed’s AD109, an oral therapy showing promising Phase III results that could transform the treatment landscape.

Previously we covered a bullish thesis on ResMed Inc. (RMD) by LongTermValue Research in April 2025, which highlighted its market share gains, strong demand, and resilient growth in sleep and respiratory care. The company's stock price has appreciated approximately by 15.52% since our coverage. This is because the thesis partially played out. The thesis still stands as ResMed remains a dominant player with durable fundamentals. Best Anchor Stocks shares a similar view but emphasizes a deeper analysis of conversion dynamics and long-term competitive risks.

ResMed Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held RMD at the end of the second quarter which was 34 in the previous quarter. While we acknowledge the potential of RMD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.