ASX200 Spotlight: ResMed (ASX:RMD) Sees Growing Interest in Healthcare Innovation

3 min read | May 08, 2025 01:07 PM AEST | By Team Kalkine Media

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ASX200 Spotlight: ResMed (ASX:RMD) Sees Growing Interest in Healthcare Innovation — Image source: Shutterstock

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Highlights

ResMed (RMD) shares show resilience with 2025 gains

Key healthcare themes driving long-term global growth

Ethical focus and tech-driven strategy position RMD as a standout

As 2025 unfolds, ResMed (ASX:RMD), a global medical technology company, has captured renewed attention. The company's shares have climbed 1.9% year-to-date, underpinned by robust fundamentals and evolving global healthcare trends. Known for its pioneering CPAP machines and cloud-connected solutions for sleep apnea and respiratory care, ResMed continues to expand its presence across over 140 countries.

ResMed’s operations are divided into two primary segments: Sleep and Respiratory Care and Software as a Service (SaaS). The former delivers essential breathing support devices, including life-support ventilators and night-time CPAP therapy, while the latter empowers out-of-hospital care providers with digital tools for improved patient management. By integrating hardware with data analytics, ResMed enhances care outcomes while aiming to reduce healthcare costs.

While the broader S&P/ASX 200 Index (ASX200) has seen a mixed performance, the healthcare sector offers certain structural advantages. The ASX200 Healthcare Index, despite delivering a marginal annualized return of -0.74% over the past five years, remains a focal point due to its long-term growth potential and economic resilience. During challenging periods like the global financial crisis, healthcare companies were among the best-performing sectors, underpinned by essential demand and reliable revenue.

Healthcare demand continues to rise globally, with US spending – representing over 40% of the global market – projected to grow at 7% annually through 2027. In addition, healthcare technology and SaaS-based medical tools are forecast to expand revenue at more than 15% per year between 2024 and 2030. This positions firms like ResMed to benefit from tailwinds in both physical devices and cloud-based software.

Ethical and sustainable investing themes further contribute to sector interest. As revealed in a recent investor sentiment study, more than half of participants intend to increase exposure to sustainable sectors. Healthcare, by its nature, aligns closely with this trend, making it a compelling area of focus for long-term-focused investors.

When considering value, ResMed’s price-to-sales ratio of 5.11x sits below its 5-year average of 8.70x. This discrepancy can suggest that either the share price has adjusted or revenue has seen steady growth—in RMD’s case, revenue has indeed risen over the past three years. As with all metrics, context remains key, and this valuation measure should be one of many tools used in analysis.

As innovation and technology continue to redefine healthcare, ResMed stands out as a globally recognized name within the ASX dividend stocks and broader ASX-listed healthcare segment.

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