ResMed Inc.

ResMed Inc. is an American medical device and digital health company that designs, manufactures, and sells devices, masks, and cloud-connected software to diagnose and treat sleep apnea, chronic obstructive pulmonary disease, and other respiratory conditions, generating $5.15 billion in revenue in fiscal 2025. Founded in Sydney in 1989 by Dr. Peter Farrell and now headquartered in San Diego, ResMed operates in more than 140 countries and treats millions of patients through a razor-and-blade model: CPAP and bilevel devices provide the installed base, and masks — replaced every few months — provide the recurring revenue stream.

This is a story about a franchise that keeps getting underestimated. The bear case — that GLP-1 weight-loss drugs will shrink the addressable sleep apnea market — has been the dominant narrative for two years and has compressed the multiple from over 30x earnings to about 18x. But ResMed's own real-world data, drawn from cohorts of millions of de-identified patients, shows something different: patients who take GLP-1s initiate CPAP therapy more often, stay on it longer, and reorder masks at higher rates than those on CPAP alone. The file turns on whether that counter-narrative holds — whether GLP-1s are a demand-generating tailwind rather than an existential threat — and whether the margin expansion ResMed has delivered over the last two years is sustainable or cyclical.

The business prints cash. Free cash flow exceeded $1.66 billion in FY2025, the balance sheet has flipped from net debt to nearly $1 billion in net cash, and the company returned over $1 billion to shareholders in the last twelve months through dividends and share repurchases while still funding tuck-in acquisitions. The question is what multiple that cash stream deserves in a world where the OSA growth narrative is contested.