Stock Analysis | ResMed Outlook - Mixed Signals Amid Strong Fundamentals

Market Snapshot

ResMed is under technical pressure with a weak technical score of 3.69, but strong fundamentals are holding up. The stock is down 2.25% recently amid mixed analyst signals and bearish indicators.

News Highlights

Healthcare sector news remains top of mind, with recent developments including:

• Stanford Health Care’s $424.9 million bond sale may boost broader healthcare infrastructure but may not directly impact ResMed.
• Private equity healthcare acquisitions highlight ongoing investor interest in the sector, which could indirectly benefit companies like ResMed if broader investment trends continue.
• Healthpoint Ventures’ AI-driven billing solutions could signal a larger shift toward tech-driven healthcare efficiency, which may align with ResMed’s long-term direction.

Analyst Views & Fundamentals

Analysts are split but leaning optimistic: the simple average rating is 3.88, and the performance-weighted rating is 4.66. Despite this, the price trend remains bearish (-2.25%), showing a mismatch between analyst sentiment and current performance.

ResMed’s fundamental strength is clear, with an internal diagnostic score of 8.03. Here are key fundamentals and their scores:

• Operating cash flow per share growth (YoY): 13.60% (score: 7.56 internal diagnostic score)
• Annualized return on equity (ROE): 25.94% (score: 12.94 internal diagnostic score)
• ROA (Return on assets): 4.83% (score: 11.24 internal diagnostic score)
• Gross profit margin (GPM): 58.60% (score: 1.73 internal diagnostic score)
• Cash flow from operations (CFOA): 4.32% (score: 16.58 internal diagnostic score)
• EV/EBIT: 22.82 (score: 9.20 internal diagnostic score)
• Shareholders’ equity growth: 7.99% (score: 11.38 internal diagnostic score)

While most factors are strong, gross profit margin is a weak spot. The overall fundamentals suggest the company is well-positioned, but the market seems to be pricing in short-term uncertainty.

Money-Flow Trends

Big money is moving in favor of ResMed, with all size categories showing a positive inflow. The overall inflow ratio is 50.85%, suggesting institutional confidence. Retail (small) investors also show a positive trend at 50.48% inflow.

The fund-flow score of 7.8 (internal diagnostic score) is a positive signal, indicating strong support from institutional and large-cap investors despite recent price weakness.

Key Technical Signals

Technically, ResMed is struggling with four bearish indicators vs. one bullish. Recent signals include:

• August 14: Ex-Dividend Date and Dividend Record Date (both bearish)
• August 5: Long Lower Shadow (bearish pattern)
• August 1: WR Overbought and Hanging Man (neutral to bearish)

Internal diagnostic scores for key indicators include:

• RSI Overbought: 7.75 internal diagnostic score (neutral to bullish)
• Long Lower Shadow: 1.00 internal diagnostic score (strongly bearish)
• Ex-Dividend Date: 1.34 internal diagnostic score (bearish)
• WR Overbought: 6.35 internal diagnostic score (neutral to bullish)

The technical outlook is weak, with no clear direction and dominant bearish signals suggesting a cautious stance.

Conclusion

ResMed shows strong fundamentals but is currently under technical pressure. Investors should consider waiting for a clearer breakout or pullback before taking positions. The recent bearish signals and weak technical score suggest that now may not be the best time to enter unless there is a strong reversal catalyst — such as strong earnings or a shift in market sentiment around the healthcare sector. Keep an eye on the upcoming earnings report and any follow-up analyst ratings for further clues.