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Valued at $35.3 billion by market cap, San Diego, California-based ResMed Inc. (RMD) develops, manufactures, distributes, and markets medical devices and cloud-based software applications for healthcare. The medical device company is expected to announce its first-quarter earnings for fiscal 2025 after the market closes on Thursday, Oct. 24.
Ahead of the event, analysts expect RMD to report a profit of $2.03 per share on a diluted basis, up 23.8% from $1.64 per share in the year-ago quarter. The company beat the consensus estimates in each of the last four quarters. During the previous quarter, consistent patient and customer demand for the company’s products and software solutions remained robust. As a result, its EPS of $2.08 surpassed the consensus estimate by 2.5%,
For the full year, analysts project RMD to report an EPS of $9.02, up 16.8% from $7.72 in fiscal 2023.
RMD stock has outperformed the S&P 500’s ($SPX) 21.9% gains on a YTD basis, with shares up 39.8% during this period. Similarly, it outshined the S&P 500 Healthcare Sector SPDR’s (XLV) 12.8% gains over the same time frame.
ResMed's strong market share in sleep apnea treatments, recovering free cash flow, and low reinvestment needs have driven its outperformance in 2024.
However, on Sept. 18, RMD stock plunged more than 5% after Wolfe Research's Mike Polark downgraded the stock to “Underperform,” setting a price target of $180. Polark is concerned that Eli Lilly and Company’s (LLY) upcoming launch of a sleep apnea treatment using its GLP-1 drug, tirzepatide, could disrupt ResMed’s business by 2025-2026.
Analysts’ consensus opinion on RMD stock is cautiously bullish, with a “Moderate Buy” rating overall. Out of 13 analysts covering the stock, six advise a “Strong Buy” rating, six suggest a “Hold,” and the remaining one analyst gives the stock a “Strong Sell.” This consensus is more bullish than a month ago when the stock had five “Strong Buy” ratings.
While RMD currently trades above its mean price target of $238.10, its Street-high target of $280 indicates an upswing of 16.4% from the prevailing price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
