Resmed CDI

The fund managers at L1 Capital Long Short Fund believe that Resmed CDI remains a fundamentally strong business that is currently undervalued by the market. In their opinion, recent concerns surrounding the potential impact of GLP-1 weight loss drugs on sleep apnoea treatment volumes have been overstated. After conducting extensive due diligence, including consultations with more than 20 sleep physicians and distributors, the managers concluded that the risks posed by GLP-1s are manageable and do not materially alter Resmed’s long-term growth prospects. This view was further validated by Resmed’s own analysis, presented at the JP Morgan conference, which aligned with their initial assessment. The fund managers were also encouraged by the company’s recent Q2 earnings report, which demonstrated better-than-expected gross margin improvements and helped alleviate market fears. Despite a rebound in the share price, they believe Resmed continues to trade at a compelling valuation—more than 20% below its historical average forward P/E. In their view, this discount does not reflect the company’s strong market position, attractive industry dynamics, and the growing need for sleep apnoea treatment globally. As such, they see continued upside potential for the stock.