ResMed (RMD) – Sleep well
February 21, 2025
ResMed develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. The company operates in two segments, Sleep and Respiratory Care, and Software as a Service. The company markets its products to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.
ResMed (RMD) posted constant-currency EPS growth of 30% in the first half of FY25, struck off revenue growth on the same basis of 10%, in what Ord Minnett viewed as another impressive result for the sleep apnoea equipment and software supplier.
The company maintained FY25 guidance for gross margin, interest, tax and other key metrics, such as R&D.
In our view, ResMed is set to continue to deliver robust growth in earnings, supported by further increases in gross margins, revenue growth and operating leverage. We also see the company as considering an increase in the size of its share buyback program by the end of FY25 given we expect the balance sheet to be net cash by then.
We maintain our Accumulate recommendation on ResMed, while our target price rise to $44.80 from $43.90.
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