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ResMed (RMD) Up 16.3% Since Last Earnings: Will it Continue?
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ResMed, Inc.‘s (RMD - Free Report) shares have increased 16.3% since last earnings compared with the industry’s rise of 1.3%. The Medical sector has moved up 3.6% in the said time frame. The company has a market capitalization of $31.33 billion.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) company appears to be a solid wealth creator for its investors at the moment.
RMD delivered better-than-expected earnings and revenues in third-quarter fiscal 2024. The company's products and software solutions experienced robust patient and customer demand, leading to double-digit mask and accessories revenue growth. The bottom line also benefited from ResMed’s ongoing operational efficiencies to drive margin improvement and increased profitability, buoying optimism.
Will the Upside Continue?
The company continues to witness strong growth in the U.S. mask and accessories business, where resupply programs are powered by its digital health ecosystem, including AirView for physicians, Brightree for home care medical equipment providers and myAir for patients. Outside the United States, the company is focused on developing, launching and scaling its direct outreach and subscription programs to help consumers control their health and engage directly in refreshing their masks, tubing, humidifiers and other accessories.
RMD identified three horizons for future growth — to grow and differentiate core sleep apnea and respiratory care business, deliver advanced medical devices and globally scalable digital health solutions and innovate advanced software solutions for care delivered digitally.
Image Source: Zacks Investment Research
In terms of the first strategy, the company is focused on ramping up its demand-generation initiatives. It is raising awareness and creating pathways for patients to find access to care for sleep suffocation across specific global markets. RMD is leveraging traditional healthcare channels and investing in cost-effective social media-driven demand generation campaigns to help consumers who are concerned about their sleep and breathing to find their way into screening, diagnostic, treatment and management pathways.
ResMed noted that the patient adoption of the myAir app continues to be strong. By the end of the fiscal third quarter, myAir registered a population of 7.8 million users. The adoption rates of the app by new patients set up on therapy with the AirSense 11 continue to be more than double that of AirSense 10. The patient utilization of a digital health platform like myAir is directly linked to higher adherence to therapy, which is directly related to better patient outcomes and increased resupply. This will ultimately drive better outcomes for the payer and the provider.
An essential aspect of its 2025 strategy is to reach millions of patients with respiratory care solutions, including non-invasive ventilation and life support ventilation, as well as newer therapeutic areas such as cloud-connected pharmaceutical delivery solutions and home-based high-flow therapy solutions.
The company paid out $70 million in dividends in the fiscal third quarter and also repurchased 261,000 shares for consideration of $50 million as part of its ongoing capital management. The company has an annualized five-year dividend growth rate of 5.25%.
ResMed enjoys a historical cash flow growth rate of 12.82% compared with industry’s 5.98%.
Estimate Trends
ResMed earnings are expected to grow by 13.2% in the next five years. Its earnings surpassed estimates in three of the trailing four quarters and missed in one, with the earnings surprise being 2.81%, on average.
The Zacks Consensus Estimate for RMD’s 2024 and 2025 has moved 2.8% and 4.9% north, respectively, in the past 90 days, reflecting analysts’ optimism.
Key Picks
Some other stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. (ALGN - Free Report) , Ecolab (ECL - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Align Technology, carrying a Zacks Rank of 2, reported first-quarter 2024 adjusted earnings per share (EPS) of $2.14, beating the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.
Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, beating the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. The stock carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.5%.
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ResMed (RMD) Up 16.3% Since Last Earnings: Will it Continue?
ResMed, Inc.‘s (RMD - Free Report) shares have increased 16.3% since last earnings compared with the industry’s rise of 1.3%. The Medical sector has moved up 3.6% in the said time frame. The company has a market capitalization of $31.33 billion.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) company appears to be a solid wealth creator for its investors at the moment.
RMD delivered better-than-expected earnings and revenues in third-quarter fiscal 2024. The company's products and software solutions experienced robust patient and customer demand, leading to double-digit mask and accessories revenue growth. The bottom line also benefited from ResMed’s ongoing operational efficiencies to drive margin improvement and increased profitability, buoying optimism.
Will the Upside Continue?
The company continues to witness strong growth in the U.S. mask and accessories business, where resupply programs are powered by its digital health ecosystem, including AirView for physicians, Brightree for home care medical equipment providers and myAir for patients. Outside the United States, the company is focused on developing, launching and scaling its direct outreach and subscription programs to help consumers control their health and engage directly in refreshing their masks, tubing, humidifiers and other accessories.
RMD identified three horizons for future growth — to grow and differentiate core sleep apnea and respiratory care business, deliver advanced medical devices and globally scalable digital health solutions and innovate advanced software solutions for care delivered digitally.
In terms of the first strategy, the company is focused on ramping up its demand-generation initiatives. It is raising awareness and creating pathways for patients to find access to care for sleep suffocation across specific global markets. RMD is leveraging traditional healthcare channels and investing in cost-effective social media-driven demand generation campaigns to help consumers who are concerned about their sleep and breathing to find their way into screening, diagnostic, treatment and management pathways.
ResMed noted that the patient adoption of the myAir app continues to be strong. By the end of the fiscal third quarter, myAir registered a population of 7.8 million users. The adoption rates of the app by new patients set up on therapy with the AirSense 11 continue to be more than double that of AirSense 10. The patient utilization of a digital health platform like myAir is directly linked to higher adherence to therapy, which is directly related to better patient outcomes and increased resupply. This will ultimately drive better outcomes for the payer and the provider.
An essential aspect of its 2025 strategy is to reach millions of patients with respiratory care solutions, including non-invasive ventilation and life support ventilation, as well as newer therapeutic areas such as cloud-connected pharmaceutical delivery solutions and home-based high-flow therapy solutions.
The company paid out $70 million in dividends in the fiscal third quarter and also repurchased 261,000 shares for consideration of $50 million as part of its ongoing capital management. The company has an annualized five-year dividend growth rate of 5.25%.
ResMed enjoys a historical cash flow growth rate of 12.82% compared with industry’s 5.98%.
Estimate Trends
ResMed earnings are expected to grow by 13.2% in the next five years. Its earnings surpassed estimates in three of the trailing four quarters and missed in one, with the earnings surprise being 2.81%, on average.
The Zacks Consensus Estimate for RMD’s 2024 and 2025 has moved 2.8% and 4.9% north, respectively, in the past 90 days, reflecting analysts’ optimism.
Key Picks
Some other stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. (ALGN - Free Report) , Ecolab (ECL - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Align Technology, carrying a Zacks Rank of 2, reported first-quarter 2024 adjusted earnings per share (EPS) of $2.14, beating the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.
Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, beating the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. The stock carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.5%.