In Thursday's early morning trading session, shares are falling 0.04% to $56.28.
ResMed is a market leader in the growing sleep disordered breathing market, making Continuous Positive Airway Pressure (CPAP) and other devices for treatment.
Going forward, it is expected that ResMed continues to grow in top line in the mid/high-single digits, driven by new Flow Generator product launches and future Mask line update, analysts said.
However, potential risks include cost competition and price, along with reimbursement headwinds, according to the analyst note.
Separately, 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, reasonable valuation levels and increase in stock price during the past year. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RMD's revenue growth trails the industry average of 21.8%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- RMD's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.76, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, RESMED INC's return on equity exceeds that of both the industry average and the S&P 500.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: RMD Ratings Report