What we think about ResMed (RMD)
ResMed in Three Words: Sleep Technology Pioneer
Discuss ResMed in our Community Forum
Background
ResMed is a global leader in sleep technology and a revolutionary force in treating obstructive sleep apnea (OSA) through its pioneering continuous positive airway pressure (CPAP) therapy. The company holds a commanding position in the global OSA homecare market as part of a duopoly with Philips. An estimated 936 million people worldwide suffer from mild to severe OSA, representing a substantially underserved market opportunity with less than 20% of OSA patients diagnosed and treated in most economies.
Beyond sleep apnea, ResMed has expanded into treating various other respiratory conditions including chronic obstructive pulmonary disease, asthma, overlap syndrome, and obesity hypoventilation syndrome – with the goal of improving quality of life, slowing disease progression, and reducing patient management costs. The company has also diversified into the Software as a Service (SaaS) business, providing out-of-hospital software platforms to support healthcare professionals.
In November 2023, ResMed announced a new operating model to accelerate long-term growth, introducing dedicated leadership in Product, Revenue, and Marketing to the global executive team. The company also continued the launch of AirSense 11, which introduces new features such as a touch screen, algorithms for patients new to therapy, and digital enhancements with over-the-air update capabilities.
Recent Q3 2024 results showed strong performance with net revenue increasing by 7% year-over-year to $1.2 billion. The company’s gross margin improved to 57.9% from 55.3% in the same quarter last year. ResMed continues to invest heavily in research and development, spending $77.1 million (6.4% of net revenue) in Q3 2024.
In summary, ResMed’s growth potential, defensible market leadership, and expansion into SaaS make it an attractive opportunity at current valuations, especially considering the vast untapped OSA market.
Conviction Rating Changes:
Join 7investing to get access to this section
Recent Company Updates:
Join 7investing to get access to this section