The stock market has greeted ResMed Inc. (ASX: RMD) with enthusiasm as its share price rallied on Friday morning above $33, defying the general trend of market sell-offs before succumbing and settling at $31.80 to end the week up 4.7%. The medical equipment company, known for its sleep-related products, has come into the limelight following an impressive fourth-quarter update.
For the quarter ending June 30, ResMed reported a revenue surge of 9%, amounting to a solid US$1.2 billion. This spike in revenue is attributed to a growing demand for its sleep devices and masks, a testament to the company’s strong foothold in the market. Additionally, ResMed’s Software as a Service (SaaS) segment displayed remarkable growth, further bolstering the company’s top-line performance.
Notably, the company’s gross margin expanded to 58.5%, with the non-GAAP figure slightly higher at 59.1%. This improvement was largely driven by a more favourable product mix and reduced costs, significantly contributing to the quarter’s earnings per share of US$1.98.
Taking a yearly view, ResMed’s revenue grew by 11% reaching US$4.7 billion, with a full-year gross margin of 56.7% (non-GAAP 57.7%). The earnings per share followed suit, standing at US$6.92, or US$7.72 when looking at the non-GAAP figures. In a move signalling confidence in the firm’s financial position, ResMed’s board declared a quarterly dividend rise of 10%.
Mick Farrell, the CEO of ResMed, has spotlighted the company’s vast addressable market of almost 2.5 billion individuals affected by sleep health and breathing disorders. He emphasised ResMed’s strategic initiative aimed at deepening market penetration and driving growth, which seems to have garnered positive results so far.
Top Australian Brokers
- City Index - Aussie shares from $5 - Read our review
- Pepperstone - Trading education - Read our review
- IC Markets - Experienced and highly regulated - Read our review
- eToro - Social and copy trading platform - Read our review
Market analysts have generally responded warmly to ResMed’s outcomes, particularly noting the stronger-than-anticipated margins, even though the earnings per share were marginally lower than projections. Nevertheless, the market’s upward pricing of the company’s shares reflects confidence in its future trajectory.
The company’s robust outlook, led by its successful quarter and strategies for future penetration into a massive potential market, paints a promising picture for the future. Investors and market spectators alike will be closely monitoring ResMed’s progress as it navigates the burgeoning healthcare equipment industry.
Don’t Buy Just Yet
You will want to see this before you make any decisions.
Before you decide which shares to add to your portfolio you might want to take a look at this special report we recently published.
Our experts picked out The 5 best ASX shares to buy in 2024.
We’re giving away this valuable research for FREE.
Click below to secure your copy
