RMD
ResMed Inc.
$195.80
Platform & Compounding FCF
65%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 33.9% below fair value
You pay
$195.80
Bear
$196.74
Fair
$296.00
Bull
$403.29
Bear
$196.74
+0.5%
8% stage 1 growth, 11% discount
Fair
$296.00
+51.2%
14% stage 1 growth, 11% discount
Bull
$403.29
+106.0%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
17.6x
Market is pricing in (growth)
7.3%
vs 13.8% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $247.27 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $296.00 per share.
Warnings
Wall Street's average price target is $247.27 (from 35 analysts). Our estimate is 28% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions