ResMed growth, shares fall|GLP-1 demand or threat?

Strong result, weaker stock

ResMed’s result did not break the business; it broke the easy reading of the stock. FY26 revenue rose 10% to about US$5.7 billion, non-GAAP earnings per share rose 17%, and the dividend increased 10%. Yet ResMed shares fell roughly 5–6% on the day.

The provisional answer is that investors are looking beyond current demand towards whether weight-loss drugs, new treatments and renewed competition could limit future growth. The available evidence does not establish that structural damage has begun.

The familiar threats

Recent coverage had already framed ResMed as a profitable company whose valuation had been reduced by fear rather than deteriorating operations. The concerns were familiar: GLP-1 drugs could reduce sleep-apnoea prevalence as patients lose weight, Apnimed’s oral therapy could offer a device alternative, and Philips may return to the US positive-airway-pressure market from 2027.

ResMed’s operating numbers, however, continued to show broad growth across devices, masks, accessories and software.

Management’s GLP-1 explanation

The new fact that changes that reading is management’s explanation for the GLP-1 effect. Chief executive Mick Farrell said weight-loss prescriptions are sending more patients to doctors, where breathing disorders are being diagnosed and treated.

In that account, GLP-1 drugs are currently expanding the pathway into ResMed’s market before they potentially reduce the number of patients needing treatment. That is an attributed management interpretation, not independent proof that the effect will persist.

A complicated demand cycle

This creates a more complicated demand cycle. In the short term, greater diagnosis can support new device starts and replacement sales. Over a longer period, successful weight loss could reduce sleep-apnoea severity for some patients.

The bodies available here do not quantify either effect, so the immediate sales uplift should not be treated as evidence that the long-term threat has disappeared.

Strong, but not clean

There is also a less comfortable explanation for the share-price fall: the result was strong, but not clean enough to remove every concern. One report highlighted a decline in reported gross margin to 58.8% and a 21% fall in quarterly free cash flow.

Another cited non-GAAP gross margin of 62.3%, improved by productivity and product demand. Those measures are not directly comparable, so they do not prove an operating collapse. They do show why investors can accept the earnings result while still demanding clearer evidence on cash conversion and margin quality.

The FY27 reset

ResMed is also guiding to FY27 revenue growth of 5–7%, below the 10% achieved in FY26. The company plans more than US$1.85 billion in dividends and buybacks, while completing the MatrixCare sale and integrating Noctrix Health.

For a holder, the important reconsideration is that capital returns and present earnings strength may support the business, but they do not settle the question of future treatment volumes. For a watcher, the lower valuation reflects a real uncertainty rather than simply a temporary market misunderstanding.

What to watch next

The next useful checkpoint is whether FY27 revenue remains within guidance while device growth, margins and free cash flow hold together.

If those measures remain resilient as GLP-1 adoption expands and competitive threats approach, the market’s pessimism may prove excessive. If growth slows further or cash and margins weaken, the share-price reaction will look less like a valuation reset and more like an early warning. On the evidence available now, ResMed remains operationally strong, but the durability of its demand advantage is unresolved.