ResMed stock got a welcome improvement to its Relative Strength (RS) Rating on Monday, with an upgrade from 78 to 82, passing a benchmark along the way. Market research shows that the best stocks often have an RS Rating above 80 as they begin their biggest runs.
The upgraded 82 Relative Strength Rating shows that ResMed bested more than 80% of all stocks in IBD's database over the past year for price performance.
Profit Growth Rate Increased Last 5 Quarters
In terms of revenue and profits, the company has posted rising EPS growth over the last five quarters. Sales gains have also moved higher during the same period. Last quarter sleep apnea device maker ResMed reported a 34% surge in earnings to $2.20 per share on an 11% hike in revenue to $1.22 billion.
Analysts in recent years expressed concern that newer medications could impact sales of ResMed's CPAP (continuous positive airway pressure) face-worn devices. That hasn't proved to be the case though, as sales and profits keep rising.
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ResMed also boasts a superb 96 EPS Rating out of 99, putting it in the top 4% of all companies for recent and long-term profit growth. It also has a 92 Composite Rating, a combination of five other key ratings. The best growth stocks usually have a Composite Rating above 90.
Additionally, RedMed has an A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale with A tops. One yellow flag is its D+ Accumulation/Distribution Rating, a gauge of institutional buying by mutual funds, ETFs and the like. Look for that to improve to a C or better.
Up 80% In Last Year; Primed For Fresh Run?
ResMed stock fell to a 132.24 low on Oct. 27, 2023. From there it's risen sharply and traded above 238 Monday afternoon, up for the day and about 80% higher in the past year. See if the stock goes on to build a fresh base that could spark a new run.
ResMed earns the No. 5 rank among its peers in the huge 126-stock Medical-Products industry group. LeMaitre Vascular is the top-ranked stock in the group.
IBD's unique Relative Strength Rating identifies market leadership by showing how a stock's price action over the last 52 weeks compares to that of other stocks on the major indexes.
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