Credit: Shutterstock photoOn Sep 21, we issued an updated research report on ResMed Inc.RMD - a pioneer in the treatment of sleep-disordered breathing ("SDB") and other respiratory disorders.
ResMed continues with its efforts to build market awareness regarding sleep apnea. With this aim, in the last reported quarter, the company released positive study results for its consumer wellness offering - S+. Currently, the company continues to focus on its target of changing 20 million lives by 2020.
ResMed is also witnessing strong growth on the international front, particularly in the European and Asia-Pacific regions. In the Asia-Pacific region, ResMed acquired Curative Medicine - a leading provider of non-invasive ventilation and SDB medical devices and accessories - in Jul 2015. We believe the Curative Medicine buyout will significantly expand ResMed's business in China and augment the company's revenues earned from the region.
Over the last five years, ResMed has returned 98% of free cash flow to shareholders via dividends and buybacks. The continuous return to shareholders reflects ResMed's confidence in its fundamentals.
Notably, ResMed reported solid fourth-quarter fiscal 2015 results, with both its top and bottom lines comfortably surpassing the Zacks Consensus Estimate. We are also impressed with the company's strong double-digit constant currency revenue growth in fiscal 2015.
However, on the flip side, the unfavorable result from ResMed's SERVE-HF trial poses a concern. Further, it has increased the company's operating expenses. Moreover, investors demonstrated a negative sentiment as they had initially been confident of ResMed's foray into the huge and growing heart failure market, based on the successful trial outcome. Reimbursement issues and competitive bidding also continue to weigh on the stock.
Currently, ResMed carries a Zacks Rank #3 (Hold).
Key Picks in the Sector
Some better-ranked stocks in the medical products space are OraSure Technologies, Inc. OSUR , ICU Medical, Inc. ICUI and NuVasive, Inc. NUVA . All the three stocks sport a Zacks Rank #1 (Strong Buy).
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RESMED INC (RMD): Free Stock Analysis Report
ORASURE TECH (OSUR): Free Stock Analysis Report
NUVASIVE INC (NUVA): Free Stock Analysis Report
ICU MEDICAL INC (ICUI): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
