A 14% slide from recent highs has investors asking whether this ASX healthcare heavyweight is merely pausing for breath or losing its edge.
Once a market darling, the ResMed (ASX: RMD) share price delivered a fantastic 390% return from 2015 to mid-2021, riding the wave of growing awareness around sleep health and the global rise of its cloud-connected CPAP devices.
However, in recent years, the pace has slowed.
Growth has matured, competition has increased, and investors are now wondering if this once-unstoppable ASX healthcare favourite is simply catching its breath.
So, is this a buying opportunity or a business past its peak?
What ResMed does
ResMed develops and sells medical devices and software for sleep apnoea and respiratory care, including its popular AirSense sleep devices, masks, and cloud-based monitoring software. The company also operates a Software-as-a-Service (SaaS) arm serving home healthcare providers through platforms like Brightree and MatrixCare.
With a presence in over 140 countries and around US$1.3 billion in quarterly revenue, ResMed has become one of Australia’s most successful global medtech stories.
Recent results: solid growth, steady margins
For the quarter ending 30 September 2025, ResMed reported a solid 9% revenue increase and net income growth of 11% to US$349 million, underpinned by stronger demand for sleep devices and masks.
Gross margins expanded around 2.8% thanks to manufacturing and logistics efficiencies, even as operating expenses rose to support acquisitions like VirtuOx and new direct-to-consumer marketing campaigns.
The challenges: new rivals and new fears
ResMed’s long-term growth has benefited from Philips’ product recall in 2021, which helped it capture additional market share.
But the competitive field is shifting.
A new class of GLP-1 weight-loss drugs from Novo Nordisk and Eli Lilly has prompted fears they could reduce the need for CPAP therapy by addressing obesity — one of sleep apnoea’s main causes.
However, so far those fears haven’t materialised. Studies show the drugs help with weight loss but don’t cure sleep apnoea, and ResMed itself reports that GLP-1 users are actually more likely to start therapy, not less.
Meanwhile, ResMed continues to invest heavily in R&D (around 7% of sales) to stay ahead of competitors like Fisher & Paykel Healthcare (ASX:FPH) and Philips.
My view: steady growth, not screaming value
ResMed is no longer the fast-growing upstart it once was, but it remains a high-quality compounder. Over the past five years, it has averaged around 11.5% annual revenue growth, maintained operating margins above 32%, and generated a return on invested capital near 15%, well above its cost of capital.
Its dividend yield sits at about 1%, but the dividend has grown every year since 2013 — over a decade of unbroken increases. For investors seeking stability with a bit of income, that’s a reassuring signal of resilience.
While the stock isn’t excessively priced, it’s not yet “cheap” either. I’d be inclined to wait for a table-thumping price — one where a clear margin of safety gives greater comfort. At around 25 times earnings, ResMed now trades slightly below its historical averages, but the company’s growth has matured into a more stable, predictable rhythm. For patient investors, it might be worth keeping on the watchlist and waiting for screaming value, rather than settling for so-so pricing.
