On August 6, ResMed (NYSE:RMD) reported fourth-quarter fiscal 2026 results capping a year of double-digit growth. Quarterly revenue rose 9% to $1.5 billion, and non-GAAP earnings per share jumped 16% to $2.95. For the full fiscal year, which closed June 30, 2026, revenue grew 10%, and free cash flow topped $1.6 billion. The company also laid out fresh fiscal 2027 guidance alongside a string of portfolio moves investors now have to weigh.
Bull Case: Sleep Demand Keeps Compounding
ResMed’s core sleep apnea business continues to find new growth avenues. Management cited a dataset of more than 2.5 million de-identified patients showing people prescribed both a GLP-1 drug and PAP therapy are 11% more likely to start on PAP than patients with a PAP script alone, and more likely to reorder supplies at both the one- and three-year marks. At 90 days after diagnosis, over 40% of patients had started PAP versus under 3% on a GLP-1; evidence suggests weight-loss drugs are steering patients toward CPAP rather than away from it.
A new partnership with wearable maker Oura has already sent roughly 13,000 users to ResMed’s sleep assessment, three-quarters of them previously undiagnosed. The AirSense 11 platform is expanding into China, new AirCurve 11 bilevel devices just launched in several markets, and fabric masks like the AirTouch N30i are driving measurably higher patient compliance. ResMed also raised its quarterly dividend 10% to $0.66 per share and plans to return over $1.85 billion to shareholders in fiscal 2027, up more than 75%.
Bear Case: The Astral Problem Lingers
The quarter carried real costs too. Life support device revenue, which includes the Astral ventilator line, fell 45% in the Americas and 38% in the rest of the world after ResMed suspended new Astral sales to prioritize parts for existing patients under an ongoing field safety action. The company booked a $42 million provision tied to that action, and expects the pause to shave about 130 basis points, or roughly $75 million, off fiscal 2027 revenue.
Free cash flow fell 21% year over year to $404 million, pressured by that provision along with higher receivables and capital spending. Operating margin slipped 10 basis points even as gross margin expanded, while R&D spending jumped 22% and SG&A rose 10% on a headline basis. The pending sale of the MatrixCare software unit is expected to cost about $0.30 per share in dilution, and the Noctrix acquisition another $0.20. Fiscal 2027 guidance calls for reported EPS growth of just 7% to 10%, well below the 16% non-GAAP growth ResMed just posted.
Wall Street’s Mixed Signals
Hedge fund ownership held roughly steady, with 45 funds holding ResMed last quarter versus 44 the quarter before. Short interest sits at 12.45% of the float, a notably high level that points to a real bear camp. Yet shares trade at a forward P/E of just 18.69 as of August 17, a modest multiple given the sleep business’s growth. That gap between a subdued valuation and elevated short interest suggests the market is still weighing the Astral overhang against everything else going right for ResMed.
What Comes Next
ResMed heads into fiscal 2027 with its core sleep business firing, GLP-1s and wearables both pulling new patients toward diagnosis, and a bigger capital return program ahead. The Astral field action and the MatrixCare divestiture are real drags management expects to work through over the year. Bulls are betting the sleep apnea growth engine keeps outrunning those one-time headwinds. Bears see a company absorbing margin and revenue disruption right when execution matters most.
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