ResMed Inc (ASX: RMD) shares are marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) sleep disorder treatment company closed on Friday trading for $38.32. In morning trade on Monday, shares are swapping hands for $38.58 each, up 0.7%.
For some context, the ASX 200 is up 0.3% at this same time.
Taking a step back, ResMed shares – which also trade on a slender 0.6% unfranked dividend yield – are up 1.3% over 12 months, underperforming the 6.4% one-year gains delivered by the benchmark index.
That underperformance really commenced after the ASX 200 healthcare stock hit a new record closing high of $45.14 on 21 August, with shares now down 14.5% from that all-time high.
But according to Jason Pohl, a partner at ECP Asset Management, the recent sell-down has been driven more by broader market dynamics than any company-specific issues with ResMed (courtesy of The Australian Financial Review). And the company's growth story appears intact.
Imgae source: Getty Images
ResMed shares tipped for most near-term upside
Asked which stock in the ECP Growth Companies fund he believes has the most near-term upside, Pohl flagged ResMed shares.
"ResMed has the most near-term upside in our view. There has been a broad sell-off across med-tech that has caught quality names along with the rest," he said.
Commenting on ResMed's first-quarter (Q1 FY 2026) results, released on 31 October, Pohl said:
The company's latest print showed revenue growth of around 9% year-on-year and another step-up in gross margin, supported by better manufacturing efficiency and lower component and freight costs. Cash generation remains healthy, and the cadence of margin expansion suggests more operating leverage if volumes keep growing.
Pohl added, "For the thesis, we care most about operating leverage, margin rebuild and widening the sleep funnel."
Over the September quarter, ResMed's gross margin continued to improve, up by 2.90%.
Connecting the dots on the near-term upside case for ResMed shares, Pohl concluded:
ResMed is leaning into diagnosis-to-treatment conversion and adherence tools, which help more patients finish the journey rather than drop out. If execution continues and the GLP-1 narrative settles into co-exist rather than replace, earnings support and multiple relief can follow.
A word from the CEO
Commenting on the outlook for ResMed shares on the day of the Q1 results announcement, CEO Mick Farrell said:
As we advance through fiscal year 2026, we remain committed to ongoing operational excellence and strategic investment in innovation, ultimately delivering strong, sustainable, profitable growth as we provide access to life-changing care for the billions of people worldwide who need our market-leading healthcare solutions delivered right where they live.
