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Learn moreResMed Inc. (NYSE:RMD) is well positioned to benefit from the long-term growth of the global obstructive sleep apnea (OSA) treatment market. Likewise, the company remains well positioned to benefit from growing awareness and penetration in the global market, backed by a robust product portfolio.
The company's OSA portfolio includes CPAP and APAP machines, led by the AirSense platform. The AirSense 10 series is one of the most widely used CPAP and APAP machine series. Beyond sleep therapy machines, it also offers nasal, nasal-pillow, and full-face masks, along with a wide range of accessories and related products.
The broad product portfolio offers multiple avenues for generating recurring revenue beyond the initial sale of a sleep therapy device.
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In the fourth quarter of fiscal 2026, ResMed's revenue increased 9% year over year to $1.5 billion, supported by strong demand for sleep devices, masks, and accessories. Americas device revenue increased 6%, while total Americas Sleep and Breathing Health revenue rose 8%. Americas masks and other revenue increased 10%. The stronger performance is particularly important as it highlights the ability to monetize the installed patient base beyond the initial device purchase.
RBC Sees Further Earnings Growth
Amid the strong OSA demand and growth, RBC Capital expects the company to achieve high single-digit earnings per share growth over the next three years. While the company could come under pressure if Philips Respironics returns to the US market, RBC assumes a return in fiscal 2028.
Similarly, on September 15, the research firm upgraded ResMed Inc. (NYSE:RMD) stock to an Outperform from Sector Perform. It also raised the price target to $262 from $244, expecting it to continue generating significant value behind market leadership in obstructive sleep apnea devices.
Competitive and Guidance Risks Remain
Nevertheless, ResMed is not immune to risks amid its strong position in sleep apnea treatment. Soaring competition is the biggest threat that could rattle the company's growth metrics. For a long time, Philips Respironics has been absent from the US market. Its return to the market could give physicians and patients a major alternative, thereby piling pressure on sales.
Additionally, the stock has come under pressure after issuing a 2027 forecast that fell short of Wall Street expectations. It expects revenue to range between $5.75 billion and $5.85 billion, below analysts' expectations of $5.92 billion. The disappointing guidance comes as the company stares at cost and competitive pressures that limit growth.
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