ResMed falls after quarterly results because earnings topped estimates

What happened

ResMed (RMD) fell 9.1% on October 30, 2026, after fiscal 2027 first-quarter results beat EPS estimates but showed mixed revenue trends driven by product shifts. The company reported non-GAAP diluted EPS of $2.91 versus $2.69 expected and said gains in sleep devices, masks and residential care software were offset by declines in life-support device sales, according to GlobeNewsWire and Benzinga. The stock opened 2.5% below the previous close and finished the session at $229.94 as trading volume ran at 3.0 times its 20-day average.

How big was the move

The decline was outsized for the stock, equaling 4.3 times a typical daily move for this stock and 6.7 percentage points worse than the healthcare sector median, which fell 2.4% on the day. The S&P 500 fell 1.8% on the same session. Over the last five sessions the stock also fell 9.1%, leaving its five-session change identical to the one-day move. Market sensitivity measured a beta of 0.63, indicating the stock tends to move less than the market even as its trading volume surged.

The technical picture

Technically, the stock sat 3.9% below its 20-day moving average and 0.8% below its 50-day moving average, while it was 2.2% above its 200-day moving average. The 50-day average was above the 200-day average, a sign of an established uptrend, and the stock had spent 18 consecutive trading days above the 200-day average. Its Relative Strength Index (14 days) read 42, inside a neutral range between 30 and 70. The shares were 17.2% below the 52-week high and had risen 4.0% over one month and 6.9% over three months.

Fundamentals and valuation

On a trailing four-quarter basis through September 30, 2026, ResMed reported revenue of $5.73 billion, which grew 9.0% from a year earlier, and diluted earnings per share of $10.95, which rose 12.1% from a year earlier. Gross margin widened to 61.2% from 60.1% a year earlier, while operating margin was 33.1% versus 33.2% a year earlier. Free-cash-flow margin stood at 49.7% and return on invested capital at 19.1%.

The balance sheet showed net cash of $400.2 million and the company reduced share count by 2.5% over the past year. Valuation metrics included a price to trailing earnings of 21.0 times trailing earnings and a price to forward earnings of 19.0 times expected earnings. The free-cash-flow yield was 8.0%. The price to trailing earnings was lower than 95% of its own readings over the past five years, whose five-year median is 30.8 times earnings. Market value stood at $35.56 billion.

Earnings and analyst expectations

ResMed’s report on October 29, 2026, delivered earnings per share of $2.91 against $2.69 expected, 8.2% above estimates, marking six consecutive quarters beating estimates. The company said first-quarter revenue was $1.4 billion, up 6% year-over-year on a reported basis and up 7% on a core constant-currency basis, driven by sleep devices, masks and residential care software. Management hosted an earnings call and provided a webcast of the conference presentation, according to GlobeNewsWire and Benzinga.

Analysts covering the stock numbered 35, with a consensus price target of $243.56, which is 5.9% above the closing price. Forty percent of analysts rated the stock Buy or Strong Buy, and the consensus rating was Hold. The typical two-day reaction after recent reports saw the stock rose 0.1%.

PromtFinance scores rank ResMed highly for quality and value, with Quality at 99 and Value at 89, while Revisions was weak at 27. Volatility was 33% annualized over 60 days, higher than 66% of its own readings over five years. Those scores underscore a profitable company with a strong balance sheet but modest near-term analyst momentum.

What to watch

• October 29, 2026: fiscal 2027 first-quarter results with EPS of $2.91 against $2.69 expected and revenue detail by product line
• January 28, 2027: next scheduled earnings report
• The stock’s valuation metrics: price to trailing earnings of 21.0 times trailing earnings and price to forward earnings of 19.0 times expected earnings
• Trading activity: session volume at 3.0 times its 20-day average and volatility 33% annualized over 60 days