ResMed Inc.RMD

Morningstar Rating

Stock Research and Analysis

by Julie Stralow, CFA

ResMed remains one of the key leaders of sleep apnea treatment. With its admirable innovative capabilities, we expect ResMed to deliver solid returns in the long run, and we look forward to seeing what it develops next.

ResMed focuses on developing Read more

Bulls Say

ResMed pursues the large, underpenetrated sleep-disordered breathing market. Growth should continue on a high trajectory as more patients incorporate ResMed's noninvasive treatments into their sleeping patterns.

With focus now shifted toward compliance rather than low-cost systems, ResMed should thrive given its history of introducing innovative products that improve sleep apnea therapy.

A recent Medicare reimbursement decision could boost at-home diagnosis of sleep apnea, which could open up the market to patients who had balked at costly, uncomfortable testing in a sleep lab. Read more

Bears Say

ResMed's ability to sell products depends largely on the willingness of third parties to pay for treatment. Lower reimbursement rates for ResMed's products would hurt revenue and margin potential.

ResMed invests significantly in research and development. If it is unable to successfully introduce new products in the marketplace, sales and margins may suffer.

Competitive sampling hurt ResMed's growth in recent years. If those practices return, the attractiveness of the sleep apnea device market could diminish and ResMed's returns could suffer. Read more

Strategy

ResMed develops medical devices to treat patients with breathing disorders. It focuses primarily on sleep apnea and aims to educate the public and physicians about the negative effects of this problem. Read more

Management

We give ResMed a C Stewardship Grade and frown upon the ongoing perks and compensation doled out to chairman Peter Farrell and other executives. Current disclosure requirements shed clear light on those practices, which include personal use of company Read more

Profile

ResMed develops, manufactures, and distributes medical devices, such as airflow generators and masks, to treat breathing disorders. It recently acquired a ventilation firm, Read more

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