ResMed Inc. Poised for Growth as Earnings Announcement Approaches
Based in San Diego, California, ResMed Inc. (RMD) develops, manufactures, distributes, and markets medical devices and cloud-based software applications for healthcare markets. With a market cap of $33.6 billion, the company mainly provides generators, masks, and related accessories for the treatment of sleep-disordered breathing (SDB) and other respiratory disorders. It is set to announce its fiscal Q2 earnings results on Wednesday, Jan. 22.
Analysts Predict Strong Earnings for ResMed
Before this significant event, analysts expect RMD to report a profit of $2.29 per share. This marks a 21.8% increase from $1.88 per share reported in the same quarter last year. The company has shown a favorable trend, consistently surpassing Wall Street’s earnings expectations over the last four quarters. In Q1 2025, RMD’s adjusted EPS of $2.20 exceeded consensus estimates by 8.4%.
Future Earnings Forecast Looks Bright
For the fiscal year 2025, analysts predict RMD will report an EPS of $9.35, reflecting a 21.1% increase from $7.72 in fiscal 2024. Additionally, EPS is projected to rise by 9.6% to $10.25 in fiscal 2026.
Impressive Stock Performance
Shares of RMD have surged 33% over the past year, outperforming the S&P 500 Index’s ($SPX) 23.7% gain and the Health Care Select Sector SPDR Fund’s (XLV), which saw a slight decline during the same timeframe.
Market Reaction to Q1 Earnings
RMD’s shares rose more than 7% after the company reported strong Q1 earnings on Oct. 24. Revenue increased by 11.1% year-over-year to $1.2 billion, exceeding expectations due to solid growth across all product and geographic segments. The gross margin expanded by 324 basis points, while adjusted operating margin grew by 432 basis points compared to the previous year, thanks to ResMed’s focus on operational excellence. The adjusted EPS jumped to $2.20, a notable 34.1% increase year-over-year, also surpassing Wall Street’s expectations.
Analyst Ratings Reflect Mixed Optimism
Wall Street analysts possess a moderately optimistic view of ResMed’s stock, assigning an overall “Moderate Buy” rating. Among the 14 analysts monitoring the stock, six recommend “Strong Buy,” seven suggest “Hold,” and one labels it a “Strong Sell.” The average price target for RMD is $253.10, suggesting a modest 10.8% potential upside from current prices.
On the date of publication, Neharika Jain 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.
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