ResMed Inc. develops, manufactures, distributes, and markets medical equipment for the diagnosis, treatment, and management of respiratory disorders with a focus on sleep-disordered breathing. The company was founded in 1989 and is based in San Diego, California.
RMD Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Resmed Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Resmed Inc ranked in the 27th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for RMD, they are:
The company's debt burden, as measured by earnings divided by interest payments, is 19.16; that's higher than 85.51% of US stocks in the Healthcare sector that have positive free cash flow.
The business' balance sheet suggests that 5% of the company's capital is sourced from debt; this is greater than only 14.6% of the free cash flow producing stocks we're observing.
RMD's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 44.31% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
IONS, A, ENTA, XRAY, and PKI can be thought of as valuation peers to RMD, in the sense that they are in the Healthcare sector and have a similar price forecast based on DCF valuation.
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