Fisher And Paykel Healthcare Shares: The NZX Giant Trading at 52x Earnings — Is the Premium Justified?

There’s a good chance you’ll come across equipment bearing the Fisher & Paykel Healthcare name if you stroll through the hallways of a large hospital intensive care unit practically anywhere in the developed world, including Sydney, London, Tokyo, and Chicago. The Auckland-based business has spent decades establishing a reputation in respiratory care that has subtly grown to be one of the more tenable positions in medical devices worldwide. With a P/E ratio of roughly 51–52x earnings, the shares, which are trading at about NZD $38.49 on the NZX and AUD $31.61 on the ASX, appear demanding until you take into account what kind of company commands that kind of premium and whether Fisher & Paykel has earned the right to carry it.

The company falls into two major categories. Fisher & Paykel manufactures humidifiers, heated breathing circuits, masks, and the consumables that go with them in hospitals. These products are used to manage patients in critical care, post-surgery, or on respiratory support. Nasal high flow therapy, which is sold under the Airvo and Optiflow brand names and uses nasal prongs to deliver humidified oxygen instead of intubation or traditional masks, is the primary growth driver in this market.

For years, the clinical case for NHF—better patient comfort, shorter hospital stays, and lower overall treatment costs—has been growing in the medical literature. Fisher & Paykel has been at the forefront of this clinical discussion, holding thousands of patents and supporting research initiatives on several continents. The company manufactures CPAP and respiratory devices for sleep apnea and chronic obstructive pulmonary disease in the home. It is the third-largest player in this market globally, behind ResMed and Philips, but Philips’s ongoing device recall issues have changed the competitive landscape in ways that have created some unexpected commercial opportunities.

The underlying growth momentum is real and ongoing, as evidenced by the H2 FY2026 revenue of NZD $544.25 million, up 14.43% year over year. This is not a business that is having trouble making money. The geographic distribution is especially intriguing: the United States accounts for 42% of revenue, followed by Europe (27%), Asia-Pacific (21%), and emerging markets (10%). The company’s success in breaking into the ICU market with NHF therapy over the course of more than ten years of focused clinical marketing effort is reflected in the US dominance, as is the size of American hospital spending. The emerging markets piece is smaller but strategically significant.

According to Morningstar’s research note on the company, developing markets are “significantly underpenetrated,” which is a polite way of saying that there is a long runway of potential adoption ahead if the company can overcome the distribution and cost obstacles those markets present.

Every investment discussion about FPH raises the question of valuation, and it is reasonable to take it seriously. In absolute terms, a trailing P/E of 51–52x is costly. ResMed trades at about half that multiple on normalized earnings, making it the closest comparable in the sleep and respiratory device space. While pointing out that the long-term earnings trajectory is still intact, Morningstar analysts have noted that some capital allocation metrics have raised concerns in recent periods.

This suggests that growth investments are absorbing returns in the near term even as the longer-term positioning improves. According to Simply Wall Street’s analysis, shareholders have experienced a 29% compound annual growth rate over the past three years, but during a time when the company’s earnings were actually declining. This serves as a reminder that expectations and positioning, rather than just current-year earnings power, have largely supported the premium multiple.

It’s difficult to ignore the twelve-year streak of dividend increases, which indicates management’s faith in the cash generation profile even in times when reported earnings decline. The dividend yield itself is modest, ranging from 1.12% to 1.57%, depending on the exchange rate and listing location, but the institutional shareholders, who own roughly 53% of the company, care about consistency. When the share price fluctuates, as it has over the last 12 months on the ASX, where the stock has returned about 2% against a broader market that has delivered closer to 8%, that type of concentrated, patient ownership typically offers some stability.

One real competitive factor is the location of manufacturing. Fisher & Paykel has production facilities in both Auckland and Mexico. The Auckland facilities showcase the company’s history and its concentration of R&D and engineering talent, while the Mexico operation offers access to North American markets with cheaper logistics costs and close proximity to the US hospital supply chain. For a business that generates 70% of its revenue in North America and Europe, the New Zealand dollar’s fluctuations against the USD and EUR create natural currency exposure, and currency tailwinds or headwinds can significantly impact reported results in any given half-year period.

With a highly patent-protected product ecosystem, strong clinical relationships in hospital systems that only reluctantly switch vendors, and a brand that carries genuine trust in settings where equipment failure is not an abstract risk, Fisher & Paykel Healthcare seems to occupy a position that is harder to build than it appears from the outside. The next earnings date in late May 2026 will provide investors with their most up-to-date view of whether the growth trajectory is still on the path that warrants the premium. It is genuinely unclear whether the share price appropriately reflects all of that.