AUS
NZ
UK
CA
USA
IND
Highlights
- ResMed's (RMD) share price has increased by 49% since the start of 2025.
- The company has a robust presence in the global healthcare industry, focusing on sleep apnea treatment and software solutions.
- Healthcare companies like ResMed are attracting significant investor attention due to their "sticky" revenue and growth potential.
The healthcare sector has always held appeal for investors looking for stability, and one company that continues to draw attention in this space is ResMed (ASX:RMD). This innovative company, based in San Diego, California, was originally founded in Australia and provides industry-leading solutions for individuals suffering from obstructive sleep apnea (OSA). ResMed’s focus on cloud-connectable CPAP machines has made a significant mark globally, as it offers high-quality devices that improve the lives of patients worldwide.
With a workforce of over 10,000 employees and a presence in over 140 countries, ResMed has carved a global niche, making notable strides in two primary areas of business. The first focuses on Sleep and Respiratory Care, where it continues to lead in developing and distributing CPAP machines, addressing needs ranging from simple therapy at night to life-support care. The second unit, Software as a Service (SaaS), helps optimize home medical equipment management, streamlining data and making healthcare more efficient. This integration of innovative devices with data-driven services is central to ResMed’s mission of reducing healthcare costs while improving patient outcomes.
The appeal of ResMed for investors has increased due to several key factors. First, healthcare spending is typically seen as "sticky," meaning that even during periods of economic downturn, people are unlikely to cut back on essential healthcare services. This gives healthcare companies like ResMed a degree of revenue stability compared to more cyclical sectors. Evidence of this was seen during the Global Financial Crisis, where healthcare was among the best-performing sectors.
Additionally, global healthcare spending, particularly in the United States, is projected to increase at a strong rate over the next several years. Experts estimate US healthcare spending will grow by 7% annually, reaching a total of US$819 billion by 2027. Within this vast sector, certain sub-categories like healthcare IT, data solutions, and SaaS companies—areas where ResMed excels—are expected to experience growth rates exceeding 15% annually until 2030.
Investors who are also mindful of sustainability and ethical concerns are likely to be drawn to companies like ResMed. With a rising global focus on sustainable and responsible investing, companies in sectors like healthcare—which provide essential public services—are well-positioned to attract the attention of those seeking both financial returns and a positive social impact.
Looking at ResMed’s share price, the company’s current valuation shows some room for growth. As a growth-oriented business, it is currently trading at a price-to-sales ratio of 4.94x, below its historical average of 8.70x. This indicates that either the share price has declined or the company’s sales have seen substantial increases—indicating solid growth prospects moving forward. With its solid financial performance and global footprint, ResMed continues to be a noteworthy name to watch in the healthcare space.
