Why ResMed (RMD) Stock Is Falling Today

NEW YORK (TheStreet) -- ResMed (RMD) shares are down -3.6% to $50.56 on Monday following a weekend report from Barron's that suggests the company stock could dip as much as 15% if the government decides to lower Medicare and Medicaid spending on home medical care products.

The Centers for Medicare & Medicaid Services is considering higher pricing and utilization scrutiny of various home use medical equipment like ResMed's continuous positive airway pressure (CPAP) face masks, according to the report.

"On the table are proposals to require prior approval for CPAP treatment and to bundle all payments into a fixed monthly fee per patient... If such economies end up affecting ResMed's profit growth, the stock could settle to a market multiple, which would send the share price down by at least 15%," said the publication.

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TheStreet Ratings team rates RESMED INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate RESMED INC (RMD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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