ResMed Shares Lag Healthcare Despite Strong Fiscal 2026 Results

ResMed shares closed at $222.99 on September 14, roughly 23% below their 52-week high of $284.87. That chart looks bruised, especially beside the healthcare sector, but the underlying business has not stalled.

RMD has gained 13.5% over the past three months, ahead of the 8.7% advance in the Health Care Select Sector SPDR Fund, or XLV. The longer view is less forgiving. Over the previous 12 months, ResMed fell about 20.5% while XLV climbed roughly 21%, leaving the sleep-apnea device maker among the sector’s conspicuous laggards. Becton, Dickinson also outperformed it during that span.

The market’s skepticism sharpened after ResMed’s August 6 fiscal fourth-quarter report. Revenue rose 9% year over year to $1.46 billion, while adjusted earnings per share increased 16% to $2.95. The complication was margin mix. GAAP operating margin slipped to 30.7% from 33.7% a year earlier, partly reflecting higher research and development spending and a field-safety notification tied to its Astral ventilator line.

That quarterly blemish obscured a stronger full-year picture. ResMed’s fiscal 2026 revenue reached $5.65 billion, up 10%, while GAAP operating margin expanded 70 basis points to 33.4%. Adjusted EPS climbed 17% to $11.17, and free cash flow totaled $1.65 billion.

Management is also giving investors a tangible reason to wait. The company returned about $1 billion through dividends and repurchases in fiscal 2026, raised its quarterly dividend 10% to 66 cents per share and said it expects to return more than $1.85 billion during fiscal 2027. It has also agreed to sell its MatrixCare business, a move that may sharpen the company’s focus on sleep and breathing health.

The bear case rests on valuation, uneven quarterly margins and uncertainty around how weight-loss drugs may affect obesity-related sleep apnea demand. The counterargument is that ResMed continues to grow, generate abundant cash and expand its connected-device ecosystem.

Wall Street has not abandoned the story. Coverage from 21 analysts carries a Moderate Buy consensus, with an average price target of $238.20, implying that the stock’s recent weakness reflects lowered expectations more than a broken operating model.