Sep 6, 2023

Sentiment: Sideways

Type of Trade: High Growth, Dividend | Defensive


Based on Q4 FY23 – The company reports quarterly.

Overview: ResMed is a global leader in the development, manufacturing, and distribution of medical equipment and digital health solutions focused on improving the quality of life for individuals with respiratory disorders and sleep-related breathing issues. Founded in 1989, the company has established itself as a pioneering force in the healthcare industry.

Key Offerings: ResMed’s primary focus lies in three key areas:

  1. Sleep Apnea Solutions: ResMed designs and manufactures a range of devices for the diagnosis and treatment of sleep apnea, a common sleep disorder. Their Continuous Positive Airway Pressure (CPAP) devices and related accessories are renowned for their efficacy in maintaining airway patency during sleep, ensuring uninterrupted rest.
  2. Chronic Obstructive Pulmonary Disease (COPD) Management: The company provides innovative non-invasive ventilation (NIV) and invasive ventilation solutions for individuals with COPD and other respiratory disorders. These technologies help patients breathe more comfortably and improve their quality of life.
  3. Cloud-Connected Healthcare: ResMed is at the forefront of leveraging digital health technology. They offer cloud-connected devices and software platforms that allow healthcare professionals to remotely monitor and manage patients’ therapy, providing data-driven insights for personalised care.

ResMed is a prominent company in the healthcare industry, specialising in the development and manufacturing of products related to sleep and respiratory care. Their main products include:

Continuous Positive Airway Pressure (CPAP) Devices: ResMed is known for its CPAP machines, such as the AirSense series. These devices are used to treat sleep apnea by delivering a continuous stream of air to keep the airway open during sleep, reducing interruptions in breathing.

Automatic Positive Airway Pressure (APAP) Devices: These devices, like the AirSense series, automatically adjust the air pressure based on the patient’s breathing patterns, providing personalized therapy for sleep apnea.

Bi-Level Positive Airway Pressure (BiPAP) Devices: ResMed offers BiPAP machines, such as the AirCurve series, which provide two different air pressure settings (higher pressure during inhalation and lower during exhalation) to assist patients with more severe respiratory conditions.

Ventilators: ResMed manufactures ventilators for both home and clinical use. These devices are crucial for patients with chronic respiratory conditions, such as chronic obstructive pulmonary disease (COPD).

Masks and Interfaces: ResMed produces a wide range of masks and interfaces, including nasal masks, full-face masks, and nasal pillows. These products ensure patient comfort and effective therapy delivery.

Cloud-Connected Solutions: ResMed’s digital health solutions, including cloud-connected devices and software platforms, allow healthcare providers to remotely monitor and manage patient therapy data. This data-driven approach enables personalized care and improved patient outcomes.

Accessories: ResMed offers a variety of accessories such as tubing, humidifiers, and filters to enhance the overall CPAP and APAP therapy experience.

These products collectively address the needs of individuals suffering from sleep-related disorders like sleep apnea and respiratory conditions. ResMed’s commitment to innovation and patient-centred solutions has made them a leading provider in the field of sleep and respiratory care.

ResMed’s performance in the fourth quarter and throughout the entirety of 2023 demonstrates robust double-digit growth. This growth has been driven by our continuous production and delivery of cloud-connected flow generator devices, which have seen a substantial global demand from patients. Our market-leading patient interface and software solutions have also experienced significant expansion during this period.

Mick Farrell, Chairman and CEO of ResMed, highlights that the combined global supply of our cloud-connected platforms, AirSense10 and AirSense11, has allowed us to effectively meet the demand for CPAP and APAP devices on a global scale. Additionally, the notable growth of our mask and patient interfaces business has been supported by both new patient setups and ongoing resupply activities, emphasising our commitment to improving patient adherence and enhancing their overall quality of life.
The residential medicine software-as-a-service business has not only achieved high-single-digit growth organically but has also seen substantial double-digit growth when considering the contribution from MEDIFOX DAN.
As the company shifts the focus to FY24, with primary goal remains centred on delivering cutting-edge therapy and digital health solutions. Resmed aims to enable a larger number of individuals to enjoy improved sleep, better breathing, and a higher quality of life within the comfort of their homes, ultimately reducing the need for hospitalisation. ResMed’s impact continues to expand significantly each quarter, positively influencing the lives of over 160 million individuals in the past year. The company claims to be well on our way to reaching our target of impacting 250 million lives by 2025 despite various devices from competition.

ResMed main competition from companies such as Philips Respironics, Fisher & Paykel Healthcare, Becton, Dickinson and Company (BD), Vyaire Medical, Drive DeVilbiss Healthcare, 3B Medical, Apex Medical, Inogen, Caire (Chart Industries), and Nihon Kohden in the sleep and respiratory care market. Nevertheless growth numbers are solid.

Financial Position

Revenue up by 23% for the quarter, and YoY percentage increase from $3.57 billion to $4.22 billion is approximately 18.15%.

NPAT (Net profit after tax) has also consistently growth in the last 3 financial years, with FY23 NPAT of $890m up from $770m.

✅ Operating cash flow of $237.4m.

✅ Diluted earnings per share of $1.56

✅ Operating cashflow of $693.3m for FY23.

✅ Quarterly cash dividend of 48c per share.

Technical Analysis

(ASX: RMD) has declined 29% in the last 12 months, mostly generated by sell off on Health Sector, despite very positive financial results.

(ASX: RMD) is currently trading at long term hypothetical support level around $23.5. This support if held, could trigger a strong buying activity. While all fundamental metrics are favourable for a rebound the technical indictors shows that the stock has not yet found its bottom.

BGS 20 Key Technical Indicators show the following:

🚩 Bearish Intersection level 1

🚩 Bearish Intersection level 2

🚩 Breakout of hypothetical support at $28, leading the stock to the long term support level $23.5

🚩Red Candle on the Heiken Ashi

✅ Strong Fundamental Metrics across all indicators.

✅ SP trading at technically discounted for the long and short term trend.

✅ SP currently trading at hypothetical support for the long and short term price average.

✅ Volume weakening on its way down, which suggest we may see buying activity “around the corner”.

Should I Buy (ASX: RMD) Now?

(Area Restricted For VIP Members Only, If You Want To Access You Will Need To Login)


The information provided by BG Trading to you does not constitute personal financial product advice. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. BG trading recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance)