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ResMed Inc. (RMD), headquartered in San Diego, California, develops, manufactures, distributes, and markets medical devices and cloud-based software applications for healthcare. Valued at $30.78 billion by market cap, the company’s digital health technologies and cloud-connected medical devices transform care for people with sleep apnea, chronic obstructive pulmonary disease, and other chronic diseases. The medical equipment company is expected to announce its fiscal fourth-quarter earnings for 2024 after the market closes on Thursday, Aug. 1.
Ahead of the event, analysts expect RMD to report a profit of $2.02 per share on a diluted basis, up 26.3% from $1.60 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing on another occasion. During the previous quarter, RMD launched the AirFit F40 mask system, combined with its entire portfolio of products, software, and solutions. It also paid $70 million in dividends and repurchased 261,000 shares.
For the full year, analysts expect RMD to report EPS of $7.70, up 19.6% from $6.44 in fiscal 2023.
RMD stock has outperformed the S&P 500’s ($SPX) 16.5% gains on a YTD basis, with shares up 20.2% during this period. Similarly, it outshined the S&P 500 Healthcare Sector SPDR’s (XLV) 9.1% gains over the same time frame.
On Jun. 24, RMD shares closed down more than 11% after Citigroup downgraded the stock to Neutral from Buy and said Eli Lilly and Company’s (LLY) Tirzepatide is a viable alternative to breathing machines in treating obstructive sleep apnea (OSA). As per the study, tirzepatide can help achieve remission of OSA in a significant number of patients compared to RMD. While CPAP therapy may still be used alongside GLP-1 initially, Citi anticipates a shift in the CPAP device market over time, with Philips possibly regaining market share from RMD.
On Apr. 26, RMD shares surged more than 18% after reporting upbeat Q3 results. Its revenue was $1.20 billion, up 7.2% year over year. The company’s adjusted EPS increased 26.8% from the year-ago quarter to $2.13, beating the consensus estimates of $1.92. The company highlighted a strategic focus on expanding the sleep and breathing health market and investing in digital health technology. While maintaining a positive outlook, it plans to leverage consumer tech and big pharma trends, focusing on the non-invasive ventilation market with its AirSense 11 and AirCurve 11 platforms.
Analysts’ consensus opinion on RMD stock is bullish, with a “Moderate Buy” rating overall. Out of 14 analysts covering the stock, six advise a “Strong Buy” rating, two suggest a “Moderate Buy” rating, and six give a “Hold.” The average analyst price target for RMD is $214.22, indicating a potential upside of 2.2% from the current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
