ResMed Inc (RMD, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $192.68, ResMed Inc has witnessed a daily gain of 1.33%, marked against a three-month change of 37.5%. A thorough analysis, underlined by the GF Score, suggests that ResMed Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 10/10
- Momentum rank: 4/10
ResMed Inc's GF Score of 96 out of 100 signals the highest outperformance potential, with particularly high ranks in profitability, growth, and GF Value, and a slightly lower rank in momentum.
Understanding ResMed Inc's Business
ResMed Inc, with a market cap of $28.34 billion and sales of $4.5 billion, is a leading respiratory care device company. It specializes in developing and supplying flow generators, masks, and accessories for the treatment of sleep apnea. The company's focus on digital health through recent developments and acquisitions aims to provide clinical data for patients, medical care advisors, and payers in the out-of-hospital setting. ResMed Inc earns roughly two-thirds of its revenue in the Americas, with the remainder spread across Europe, Japan, and Australia. The increasing diagnosis of sleep apnea, aging populations, and rising obesity rates contribute to a structurally growing market for ResMed's products.
Financial Strength Breakdown
ResMed Inc's Financial Strength rating is a testament to its resilient balance sheet and prudent capital management. An Interest Coverage ratio of 20.71 indicates a strong ability to cover interest obligations, far exceeding Benjamin Graham's recommended minimum of 5. The Altman Z-Score of 9.33 suggests a low probability of financial distress, and a Debt-to-Revenue ratio of 0.31 showcases ResMed Inc's strategic debt management.
Profitability Rank Breakdown
The Profitability Rank of ResMed Inc reflects its superior ability to generate profits compared to its peers. The company's Operating Margin has shown a consistent increase over the past five years, indicating efficient operational management. Furthermore, ResMed Inc's Predictability Rank of 4.5 stars out of five highlights its consistent performance and reliability for investors.
Growth Rank Breakdown
ResMed Inc's high Growth Rank underscores its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 12.2% outperforms 63% of competitors in the Medical Devices & Instruments industry. Additionally, the significant growth in EBITDA over the past few years highlights ResMed Inc's ability to drive growth and profitability.
Conclusion: ResMed Inc's Position for Outperformance
Considering ResMed Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking companies with similar robust financial health can explore more options using the GF Score Screen available to GuruFocus Premium members. With its strong market position and strategic focus on digital health, ResMed Inc is poised to continue its trajectory of growth and profitability, making it a compelling consideration for value investors.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
