ResMed Inc. Just Recorded A 15% EPS Beat: Here's What Analysts Are Forecasting Next

ResMed Inc. (NYSE:RMD) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.1% to hit US$1.2b. ResMed reported statutory earnings per share (EPS) US$2.04, which was a notable 15% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for ResMed

Taking into account the latest results, the most recent consensus for ResMed from 23 analysts is for revenues of US$5.03b in 2025. If met, it would imply a notable 9.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 25% to US$8.13. Before this earnings report, the analysts had been forecasting revenues of US$4.98b and earnings per share (EPS) of US$7.67 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$215, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic ResMed analyst has a price target of US$264 per share, while the most pessimistic values it at US$180. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ResMed's past performance and to peers in the same industry. It's pretty clear that there is an expectation that ResMed's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.6% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.0% annually. So it's pretty clear that, while ResMed's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ResMed's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$215, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple ResMed analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that ResMed is showing 1 warning sign in our investment analysis , you should know about...

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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.