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RMD · ResMed Inc.

Medical - Devices · mkt cap $26.5B · calls: Q3 FY2026 vs Q2 FY2026
15.0 conviction · conf-adj 15

conf –

enthusiasm:12.0 · trend:-5 · quantifies:0 · impact:0 · under_radar:5 · credibility:0 · business_impact:4 · disruption:0 · commitment:-4 · confirmation:3

Enthusiasm latest 4 / prev 7 (falling)

ResMed's AI story is narrow and product-led: FDA-cleared AI in Comfort Match/SmartCare (beta in myAir in Q2), positioned as a sleep-coach-style recommender for device comfort settings and adherence—not a revenue engine management sizes. Enthusiasm was materially higher in Q2 prepared remarks and fell in Q3 to a brief, defensive Q&A mention amid competition questions, with no new AI metrics or adoption data. Large-scale claims and myAir cohort analyses are substantive data science but are not attributed to AI products; credibility on AI is early-stage and aspirational until management quantifies adoption or adherence lift tied to AI features.

PAST (realized)
CURRENT (now)
FORWARD (guidance)
TRACK RECORD — PROMISE vs DELIVERY

—/100 (no quantified promises)   no-quantified-promises  6 calls reviewed

Over six calls management describes AI/ML product rollouts and internal productivity uses qualitatively but never sets dated numeric AI targets; progress (e.g., Dawn in Australia then the U.S., FDA-cleared Comfort Match) is reported without prior quantified commitments to judge against.

PRICED-IN (REFINED)
MEDIUM

Est. revisions flat  ·  Fwd P/E 19.2  ·  EV/Sales 4.6x

AI claim maps to Software As Service, Sleep And Respiratory

Analyst rating counts are stable over six months (buy 8–9, hold 7–8, strongBuy slipped 3→2) with no clear upgrade migration, while the usable price-target signal shows decay (lastQuarterAvg $256.67 vs lastYearAvg $285.94; no last-month updates), so revision momentum is not rising. Forward consensus still embeds solid growth (FY26–27 EPS ~+10–17%, revenue ~+8–10%), but at ~19.2x next-FY EPS and ~4.6x EV/Sales the multiple already carries a quality/SaaS premium versus a typical mature device name—not extreme, but not cheap. AI-driven efficiency and connected-care upside would most plausibly flow through Software As Service and, secondarily, connected Sleep And Respiratory devices; with flat revisions and only moderate—not rich—valuation, the AI thesis is partly reflected in the SaaS mix premium but not fully de-risked via rising estimates, yielding a mixed medium priced-in verdict.
COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS
5Q2 FY20255Q3 FY20257Q4 FY20258Q1 FY20269Q2 FY20265Q3 FY2026

AI enthusiasm across 6 calls — trend → flat

Boilerplate ML/GenAI gave way to Dawn and FDA-cleared Comfort Match, then AI largely dropped from prepared remarks.

RECENT AI CATALYSTS & NEWS
BUSINESS IMPACT - QUALITATIVE MATERIALITY

5/10 qualitative impact   moderate  medium-term · soft evidence

Where AI matters: connected care adherence (myAir/SmartCare)

FDA-cleared Comfort Match beta is a real product-led AI use case for comfort settings and adherence, but it is limited rollout with no adoption or adherence lift metrics and management no longer sizes AI as a revenue or margin driver.

Caveats: Comfort Match may not move measurable adherence or resupply/SaaS without disclosed cohort proof; Competitors can match intelligent AutoSet/cloud features, narrowing differentiation; myAir/SaaS narrative premium could disappoint if AI stays beta and immaterial to estimates

AI DISRUPTION / CANNIBALIZATION RISK  tailwind · 2/10

ResMed's economics rest on regulated PAP devices, masks, and resupply where AI augments settings and coaching rather than replacing positive-pressure therapy; algorithm parity from rivals is a competitive issue, not structural commoditization of the core sale.

OPTIONS / MARKET STRUCTURE

option liquidity: fair

ATM IV
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TYPICAL BID-ASK
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OPEN INTEREST
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proxy inputs — dollar-ADV $230M · beta 0.845 · px $182.82

source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.

CONFIRMATION — INSIDERS · 13F · LANGUAGE
Mixed — insiders selling, institutions adding, management language 1/10 hedged.
INSIDERS selling 17 open-market sell(s) vs 0 buy(s) — net distribution
INSTITUTIONS (13F) adding as of 2026-03-31: 102 new / 117 closed positions; 460 increased / 319 reduced; institutional ownership +0.06pp; -19 net 13F holders
MGMT LANGUAGE 1/10 hedged Prepared remarks omit AI/ML/automation; only generic digital ecosystem and analytics, no ownership language.
VERBATIM AI QUOTES
“Artificial intelligence is another vector for our product innovation. At ResMed, we view AI as a resource that will amplify and personalize care.”
— Michael Farrell, Q2 FY2026
“Last quarter, I talked about our limited beta launch of Comfort Match, an AI-enabled comfort setting recommender within the myAir software platform.”
— Michael Farrell, Q2 FY2026
“This is ResMed's first FDA-cleared AI-enabled medical device.”
— Michael Farrell, Q2 FY2026
“Comfort Match is intended to help people become more confident and more comfortable with CPAP, APAP and bilevel therapy.”
— Michael Farrell, Q2 FY2026
“What I expect to see is having an AI algorithm that is effectively a sleep coach to help you start therapy that can really help you improve not just short-term adherence, but also long-term adherence as you get used to therapy.”
— Michael Farrell, Q2 FY2026
“With help from AI, we think this technology will unlock decades worth of comfort features that have been underutilized by consumers and patients alike.”
— Michael Farrell, Q2 FY2026
“We recently launched the F30i Comfort as well as the F30i Clear range of masks.”
— Michael Farrell, Q2 FY2026
“when was the last time we upgraded our AutoSet algorithm? There is new technology called AI. It is more difficult to adopt in the medical space, and we already have one FDA-cleared product in AI that we talked about in SmartCare last quarter.”
— Michael Farrell, Q3 FY2026
“Watch this space from ResMed Inc. We are focused on smaller, quieter, more comfortable, more cloud-connected, and more intelligent therapies.”
— Michael Farrell, Q3 FY2026
“We will bring out more intelligent therapies over time.”
— Michael Farrell, Q3 FY2026
“I also talked about algorithms and how digital upgrades can also come with hardware upgrades—watch this space.”
— Michael Farrell, Q3 FY2026
ANALYST QUESTIONS ON AI
Q (Q3 FY2026, Analyst, KeyBanc Capital Markets): Thinking about one of the competitive launches that took place late in 2025—can you speak to the level of noise you have observed in the U.S. around that launch, and whether you have seen any level of market share shift?
A: As the market leader, we look at every new entrant and technology. I would say we are productively paranoid. There has been no launch in the last 12 months that made us say, “We did not think of that.” But we do use competition to challenge ourselves—when was the last time we upgraded our AutoSet algorithm? There is new technology called AI. It is more difficult to adopt in the medical space, and we already have one FDA-cleared product in AI that we talked about in SmartCare last quarter. Watch this space from ResMed Inc. We are focused on smaller, quieter, more comfortable, more cloud-connected, and more intelligent therapies. We will bring out more intelligent therapies over time. As you saw in the devices number—very solid in the U.S., 6% growth—we are not seeing an impact. We look at new patient starts, new customer adoption, and all new technologies. There is no new competitive threat that we are worried about, but we are accelerating our own pipeline.