Should you buy ResMed stock? (February 2024)

Published first at https://www.3minutebreakdowns.com ResMed stock analysis. Ticker: RMD This company may have sold off prematurely. Resmed Inc. provides medical devices that treat sleep apnea and COPD. At the latest share price, the company has a market cap of 26.6 billion dollars. Revenue over the last 12 months comes to 4.5 billion with 890 million of net income and 963 million of free cash flow which means the company is valued at 6 times revenue and 30 times earnings. Resmed occupies a leading position in the treatment of sleep apnea which is said to affect more than 1 billion people worldwide. The company has benefited from a product recall from one of its largest competitors, Philips, and that isn't likely to be resolved for several years. In the meantime, Resmed has continued to expand manufacturing and gain dominant market share. Revenues have grown every single year for the last 10 years, net income margins have increased to 20% and free cash flow has advanced to a record level. But despite such impressive performance, Resmed stock has actually fallen 40% on concerns over GLP-1 weight loss drugs like Wegovy. Because obesity is a leading cause of sleep apnea, investors are concerned that weight loss drugs lead to fewer cases of sleep apnea and less demand for Resmed’s products. The reality, however, may be more nuanced. In its latest earnings call, ResMed presented data on over 500,000 patients which showed patients on GLP-1 drugs actually had a 10% higher likelihood of starting treatment for sleep apnea. And overall cases of sleep apnea may continue to rise due to aging populations. If so, weight loss drugs may actually help Resmed rather than hurt it and if that’s the case Resmed stock can be a big winner. #stocks #investing #stockstobuy #3mb