ResMed Inc. (RMD) DCF Valuation
TGM's two-stage DCF values ResMed Inc. (RMD) between $153.51 and $283.52 depending on assumptions, with a base case of $204.82. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (8.1%) reflects its beta.
What would today's price require?
$198.60 is justified only if free cash flow grows about +14.9% a year (fading to 2.5% long-run) at a 8.1% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 12.7%/yr | 9.1% | $153.51 |
| Base case | 15.7%/yr | 8.1% | $204.82 |
| Optimistic | 18.7%/yr | 7.1% | $283.52 |
| Analyst DCF (FMP) | independent reference — different model | $313.47 | |
Current Price
$198.60
Market-Implied Growth
+14.9%/yr
vs +19.0% 5Y actual
Model Scenario Range
$153.51 – $283.52
model output — not a price target
RMD DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for RMD (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $922.9M · 0.15B shares · net cash $541.2M
Estimated Fair Value
$327.67
+65.0% vs $198.60
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 15.7%/yr FCF growth and 10-year horizon fixed. Green = above today's $198.60; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.1% | $443 | $486 | $540 | $612 | $712 |
| 7.1% | $353 | $379 | $410 | $449 | $499 |
| 8.1% | $291 | $308 | $328 | $351 | $380 |
| 9.1% | $246 | $257 | $271 | $286 | $304 |
| 10.1% | $211 | $220 | $229 | $240 | $252 |
About ResMed Inc.
ResMed Inc. is a leading global medical technology enterprise engaged in the creation, production, distribution, and marketing of healthcare devices and connected digital solutions. The company operates through two primary segments: Sleep and Respiratory Care, and Software as a Service. Its extensive product range addresses a variety of respiratory disorders, encompassing advanced medical and consumer technologies, ventilation devices, diagnostic equipment, mask systems for both clinical and personal use, headgear, and related accessories, alongside dental devices. ResMed also provides sophisticated cloud-based informatics to enhance patient management and operational efficiency. Notable software offerings in its respiratory portfolio include AirView, for remote device monitoring and setting adjustments; myAir, a personalized application designed to support sleep apnea patients with education and troubleshooting for better engagement and adherence; and U-Sleep, a compliance tracking platform for home medical equipment providers. Complementing these are connectivity modules and Propeller solutions. Furthermore, ResMed offers a robust suite of out-of-hospital software. This includes Brightree, a business management platform for various home care service providers (e.g., HME, pharmacy, infusion, orthotics, prosthetics); MatrixCare, providing care management for senior living, skilled nursing, and hospice organizations; and HEALTHCAREfirst, which supplies electronic health records, billing, coding services, and analytics for home health and hospice agencies. ResMed distributes its offerings primarily to sleep clinics, home healthcare dealers, and hospitals via a global network of distributors and a direct sales force, serving approximately 140 countries. Founded in 1989, the company's headquarters are located in San Diego, California.
- Sector
- Healthcare
- Industry
- Medical - Devices
- CEO
- Michael J. Farrell