• Earlier this week, analyst commentary identified ResMed as a new short opportunity, arguing that wider adoption of lower-cost GLP-1 weight-loss drugs could constrain future sleep-apnea patient growth, while insiders sold about US$3.8 million of stock over three months.
• At the same time, other investors highlight the durability of ResMed’s mask and tubing consumables and its AirView connected-care platform, arguing these create embedded, recurring revenue streams even as GLP-1 therapies evolve.
• We’ll now examine how concerns over GLP-1 drugs potentially shrinking ResMed’s patient pool may reshape the company’s longer-term investment narrative.

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ResMed Investment Narrative Recap

To own ResMed, you have to believe sleep apnea remains a large, underdiagnosed condition where long-term CPAP use and digital monitoring support recurring revenue from masks, tubing, and software. The new short call and GLP-1 concerns sharpen the near term risk around future patient additions, but do not obviously change the current key catalyst: how resilient ResMed’s consumables and connected-care revenues prove as weight-loss drugs become more common.

The most relevant recent development here is the identification of ResMed as a short opportunity tied explicitly to GLP-1 adoption and insider sales of about US$3.8 million. That bears directly on the existing risk that alternative therapies could slow device adoption and pressure margins, while also testing the bullish narrative that ResMed’s installed base and AirView data platform can keep recurring revenue growing even if new patient growth moderates.

Yet the biggest issue investors should be aware of may be how GLP-1 driven weight loss intersects with ResMed’s dependence on...

ResMed's narrative projects $6.9 billion revenue and $2.0 billion earnings by 2029. This requires 7.7% yearly revenue growth and an earnings increase of about $0.5 billion from $1.5 billion today.

Uncover how ResMed's forecasts yield a $270.60 fair value, a 39% upside to its current price.

Exploring Other Perspectives

Some of the lowest estimate analysts were already cautious, penciling in revenue of about US$6.6 billion and earnings of US$1.8 billion by 2029, and they may now see GLP-1 uncertainty as further reason to question whether ResMed’s recurring mask and accessory revenue can meet even those lower expectations.

Explore 6 other fair value estimates on ResMed - why the stock might be worth as much as 43% more than the current price!

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your ResMed research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free ResMed research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ResMed's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.