ResMed (RMD) Stock Analysis & Winston Score

ResMed makes medical devices and software that help people breathe better while they sleep. Its main products are CPAP machines and masks used to treat sleep apnea, a condition where people stop breathing during the night. ResMed sells to hospitals, sleep clinics, and directly to patients, and it is one of the two largest sleep apnea device makers in the world.

The company earns money by selling hardware like CPAP machines and replacement masks, and also through software subscriptions that help doctors and home care companies manage patients remotely. ResMed operates in over 140 countries, with most revenue coming from the United States, Europe, and Asia-Pacific. Its large installed base of connected devices creates switching costs that make it hard for customers to move to a competitor, but a key risk is that new weight-loss drugs like GLP-1 medications could reduce the number of people diagnosed with sleep apnea over time, which would slow demand for its core products.

Winston Score History

Politician Trades

16 trades / 12mo

8 Congressional buys and 8 sells on RMD in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+10.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+9.2% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

$331M/ year

↑ Rising (+8% vs prior year)

6.4% of revenue

Below sector average (18%)

R&D investment increasing — building for the future

Insider Activity

0.6%ownership

Relatively low insider ownership

Cash Position

Cash flow positive

$1.7B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

ResMed is a rare growth stock that's already generating positive cash flow while growing at 11%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.6% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 146.5M (2021) → 147.3M (2025)

Score breakdown

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Quality

Gross Margin

62.2%

Premium pricing power — 62.2% gross margin

Operating Margin

34.9%

Excellent — 34.9% operating margin

ROCE

7.0%

Weak — 7.0% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+9.1%

Steady sales growth (9.1% YoY)

EPS YoY

+19.7%

Earnings growing fast (19.7% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

131%

Turns 131% of profit into real cash

FCF Margin

34.5%

Converts sales into free cash efficiently (34.5%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.11

Conservative — low debt load (0.11)

Interest Cover

80.20x

Comfortably covers interest (80.2x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

19.0x

Fair value — P/E 19.0

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+4.9

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (19.0 → 14.1)

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Dividends

Dividend Yield

1.27%

Small dividend — 1.27% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+13.2%

Dividend growing fast (13.2% YoY)

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