Innovative health solutions boost ResMed’s FY2025 performance

Deep dive into ResMed

In this week’s edition of IG Macro Intelligence, we take a look at the financial year (FY) 2025 earnings from ResMed and its outlook ahead.

Breathing easy

Medical technology firm ResMed was straight out of the blocks this August reporting season with strong FY25 numbers.

The company, which specialises in sleep apnoea and respiratory care devices, posted a 10% rise in FY2025 revenue to $5.15 billion, while net income rose 37% to $1.4 billion. Margins improved thanks to supply chain efficiencies and currency tailwinds.

In the fourth quarter (Q4) alone, profit jumped 30% to $380 million. ResMed also lifted its quarterly dividend by 13% to $0.60. 

ResMed Q4 2025 results

Growth was driven by solid demand for sleep devices and expanding digital health offerings. 

Chief Executive Officer (CEO) Mick Farrell told Ausbiz the results show strong momentum heading into FY2026, as ResMed continues to invest in innovation and its connected care platform.

Dream big

ResMed’s ASX-listed CHESS Depositary Interests (CDIs) are up more than 30% over the past 12 months, and ASX Tradewatch data show the stock is in a strong bullish trend, confirmed by multiple indicators. Specifically, the 5-day moving average of the stock is above the 50-day, while both the 20 and 200-day moving averages are trending higher.

ResMed daily chart

Morgan Stanley analysts say ResMed’s result was ahead of expectations, partly supported by foreign exchange (FX) benefits and its recent acquisition of VirtuOx.

ResMed Q4 2025, VirtuOx & FX growth chart

Morgan Stanley remains overweight on the stock after the Q4 and FY results, with analysts saying they continue to see a favourable growth outlook and increased uptake in addressable markets, reflecting increased diagnosis and awareness of sleep apnoea.

Morgan Stanley says ResMed remains its preferred sector exposure, and the stock is seen as attractive by a raft of brokers surveyed by Refinitiv.

In fact, of the 12 analysts, only one has a 'hold', while nine brokers have a 'buy' recommendation and two have a 'strong buy' recommendation. The average target price according to Refinitiv is $47.44, suggesting the stock can rise another 11% from current levels.

ResMed historical trends and price targets

Citi analysts have lifted their price target on ResMed in the wake of its results to $49 from $45. The analysts also increased their FY2026 and FY2027 earnings per share (EPS) forecasts by 2-4%, driven by expectations of stronger gross margins and an additional share buyback, partially offset by a higher assumed tax rate.

John Lockton from Sandstone Insights told Ausbiz it’s a result that can allow long-term holders of the stock to breathe easy.

ResMed buy/sell indicators and analyst projections

Cut the fat

Two years ago, fears that GLP-1 weight loss drugs like Ozempic and Mounjaro would reduce sleep apnoea rates by lowering obesity rates sparked a sell-off in ResMed shares.

ResMed weekly chart

CEO Mick Farrell has been at pains to point out real-world data that show GLP-1 users are more likely to start and stick with continuous positive airway pressure (CPAP) therapy.

Meanwhile, a recent report from Barron’s highlighted that ResMed’s earnings growth and CPAP usage trends made the initial GLP-1 scare appear unfounded. Analysts structure annual sales growth around 10% to approximately $5.3 billion by 2029.

Analysts now see GLP-1s as complementary, not competitive, and ResMed’s margin expansion, digital health strategy, and long-term demand outlook continue to support the stock’s recovery and growth narrative.