ResMed (RMD) Hits 52 Week High: What’s Driving The Stock?
On December 16, the actions of ResMed RMD hit a new 52 week high at $ 156.20, ending the session slightly lower at $ 156. In fact, the stock has risen nearly 22.5% since its fiscal 2020 first quarter results announced on October 24.
Double-digit global revenue growth in the first quarter, driven by strong sales in Software as a Service (SaaS) business, product and mask device launches as well as robust geographic expansion were behind the takeover.
Let’s take a closer look at the growth factors.
Robust first quarter results
First quarter tax revenues in EMEA and APAC combined recorded an 8% increase at CER compared to the previous year. A massive 83% increase in global SaaS revenue, driven by the continued expansion of Brightree’s offerings and the takeover of MatrixCare, has sparked optimism.
Gross margin for the quarter was 59.5%, translating into an expansion of 115 basis points (bps) from last year’s figure. Adjusted operating margin in the reported quarter increased 115 basis points to 27.8%.
Other encouraging factors
Investors are optimistic about the company’s recently signed collaborative agreement with Cerner as a new preferred provider of home and hospice care software. This partnership strengthens ResMed’s position as a leading provider of digital health solutions for out-of-hospital healthcare. In fact, ResMed’s MatrixCare team is making steady progress toward signing a contract with a major healthcare system.
The market is bullish on ResMed’s expansion of its AirFit mask portfolio with the introduction of its first crown-connected nasal CPAP mask, AirFit N30i, in the United States. The company’s flagship masks, AirFit F20 in the integral category and AirFit N20 in the nasal category, enjoyed strong momentum in global markets in the first quarter of fiscal 2020. The Company’s last three mask launches, at namely the F30, the N30i and the P30i, have started to contribute significantly to the turnover. In October 2019, the company released its latest innovation, the N30, the world’s very first tube nose cradle CPAP mask in a new product subcategory (called the Minimalist Category).
Meanwhile, ResMed has had an excellent run on the stock exchanges over the past year. The stock rebounded 39.7%, more than the overall industrygrowth of 13.4%. The company currently has a market capitalization of $ 22.09 billion.
Zacks Rank and other stocks worth seeing
ResMed carries a Zacks Rank # 1 (strong buy).
Haemonetics Corporation HAE, NuVasive, Inc NUVA, and Omnicell OMCL are a few other top-ranked stocks in the broader medical field, each carrying a Zacks Rank # 2 (Buy). You can see The full list of today’s Zacks # 1 Rank stocks here.
Haemonetics has a projected long-term profit growth rate of 13.5%.
NuVasive has an expected long-term earnings growth rate of 10.9%.
Omnicell has a long-term earnings growth rate of 12.5%.
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