Core Viewpoint - The article discusses the relationship between earnings growth and stock price movements, highlighting that stocks can decline despite earnings growth if they fail to meet market expectations [1][10][23]. Earnings Growth and Stock Performance - Companies such as ResMed (RMD), Badger Meter (BMI), Leidos (LDOS), and Ingersoll Rand (IR) are currently showing strong earnings growth [2]. - Earnings estimates are crucial as they reflect analysts' views on sales growth, product demand, competitive environment, profit margins, and cost control, serving as a valuable tool for investment decisions [3]. Screening Criteria for Stock Selection - The screening measures include a Zacks Rank of 2 or lower, indicating 'Buys' or 'Strong Buys', and a year-over-year earnings growth of at least 5% [4]. - Stocks that have seen their annual earnings estimates revised higher in the last week are also considered [5]. Selected Stocks with Earnings Growth - The screening process narrowed down to six stocks, with the top four being: - ResMed, with an expected earnings growth rate of 19.6% for the current year [6]. - Badger Meter, expected earnings growth rate of 25.5% [17]. - Leidos, expected earnings growth rate of 19.9% [18]. - Ingersoll Rand, expected earnings growth rate of 11.8% [19]. Importance of Earnings Growth - Earnings growth is emphasized as the top priority for any organization, as profitability is essential for survival [10]. - Investors are encouraged to look for stocks with historical earnings growth and rising earnings estimates [12].

Core Insights - U.S. stocks exhibited mixed performance, with the Dow Jones index increasing by approximately 300 points on Monday [3] - ResMed Inc. experienced a significant decline in share price following sleep apnea data from Lilly, leading Citigroup analyst Mathieu Chevrier to downgrade the stock from Buy to Neutral [3][4] Company Performance - ResMed shares fell by 10.4%, closing at $184.35 [4] - Molecular Partners AG saw a 22.6% drop in shares, reaching $7.43 [6] - Cryoport, Inc. shares decreased by 19.9% to $7.77 after announcing a strategic partnership with Minaris Regenerative Medicine [6] - BridgeBio Pharma, Inc. shares declined by 19.2%, closing at $22.11 [6] - BitFuFu Inc. shares fell by 17.7% to $5.11, influenced by a drop in Bitcoin price [6] - Inspire Medical Systems, Inc. shares decreased by 15% to $136.88, with a price target reduction from $210 to $170 by Stifel analyst Jonathan Block [6] - Ginkgo Bioworks Holdings, Inc. shares fell by 13% to $0.3661 [6] - MicroStrategy Incorporated shares dipped by 10.3% to $1,328.74, also affected by Bitcoin's decline [6] - Paymentus Holdings, Inc. shares decreased by 9.3% to $16.97 [6] - Super Micro Computer, Inc. shares fell by 8.5% to $827.94 [6] - Sirius XM Holdings Inc. shares declined by 8% to $2.6950, despite an upgrade from Evercore ISI Group [6] - Coinbase Global, Inc. shares dipped by 7.7% to $208.51 following Bitcoin's price drop [6] - NVIDIA Corporation shares fell by 5.8% to $119.11, possibly due to a pullback after recent momentum [6]

Core Insights - ResMed shares experienced a significant decline following the release of Eli Lilly's clinical trial data indicating that its weight-loss drug Zepbound effectively reduces sleep apnea severity without the need for traditional masks [1][2] - The market reaction suggests potential challenges for ResMed's business model, which heavily relies on sales of sleep apnea devices [2][3] Company Overview - ResMed specializes in treating sleep apnea and generated approximately $1.2 billion in revenue from device sales in its most recent quarter [3] - The company has noted a positive correlation between the use of GLP-1 weight-loss drugs and the demand for sleep apnea treatments, indicating a sizable market risk if these drugs reduce the need for masks [4] Industry Impact - Eli Lilly's Zepbound has shown promise in reducing sleep apnea symptoms, with studies indicating a decrease in airflow restrictions during sleep [5] - The FDA has been approached to add sleep apnea to Zepbound's treatment label, with regulatory action anticipated by the end of 2024 [5]

Core Insights - ResMed presented 13 new clinical studies at SLEEP 2024, highlighting the effectiveness of positive airway pressure (PAP) therapy for obstructive sleep apnea (OSA) [1][6] Group 1: Prevalence of Insomnia - A study indicated that approximately 17% of adults in Northern America, Latin America, and the Caribbean suffer from insomnia, emphasizing the need for prioritizing sleep health in public health initiatives [2] Group 2: OSA and Depression - Research found that among OSA patients, nearly 17% had depression, with 25.5% of those being women. Patients with depression exhibited a higher burden of comorbidities and lower adherence to PAP therapy, particularly among women [4] Group 3: Impact of PAP Therapy - A study on patients with OSA and comorbid insomnia (COMISA) revealed that those who adhered to PAP therapy had significantly lower all-cause hospitalizations (0.09 vs 0.13) and emergency room visits (0.46 vs 0.60) compared to those with lower adherence, indicating improved health outcomes [7]

Core Insights - ResMed presented 13 new clinical studies at SLEEP 2024, highlighting the effectiveness of Positive Airway Pressure (PAP) therapy for treating Obstructive Sleep Apnea (OSA) and its impact on sleep health [4] Group 1: Clinical Research Findings - A study indicated that adherence to PAP therapy is linked to fewer hospital visits among patients with OSA and comorbid insomnia (COMISA), showing all-cause hospitalizations per person at 0.09 for adherent patients compared to 0.13 for non-adherent patients, and emergency room visits at 0.46 versus 0.60 respectively [2] - Research on the prevalence of insomnia across the Americas found that approximately 17% of adults experience insomnia, emphasizing the need for prioritizing sleep health in public health initiatives [5] - An analysis of over 345,000 adults with OSA revealed that 25.5% of those with depression were women, and those with depression showed lower adherence to PAP therapy, particularly among women [7] Group 2: Company Overview - ResMed is focused on pioneering innovative solutions that treat chronic diseases, including sleep apnea and COPD, through digital health technologies and cloud-connected medical devices, aiming to improve quality of life and reduce healthcare costs [8]

Core Insights - ResMed, Inc. is a leading designer, manufacturer, and distributor in the global market for generators, masks, and related accessories for the treatment of sleep-disordered breathing (SDB) and other respiratory disorders [12] - The company has received a 1 (Strong Buy) rating on the Zacks Rank, indicating strong potential for performance [23] - Recent earnings estimates for fiscal 2024 have been revised upwards by five analysts, with the Zacks Consensus Estimate increasing by $0.24 to $7.70 per share, reflecting a positive outlook [13] Zacks Rank and Style Scores - The Zacks Rank utilizes earnings estimate revisions to help investors build successful portfolios, with a focus on stocks rated 1 (Strong Buy) or 2 (Buy) [4][18] - ResMed has a Momentum Style Score of B, with shares increasing by 0.2% over the past four weeks, indicating positive momentum [20] - The VGM Score, which combines Value, Growth, and Momentum Style Scores, rates ResMed as B, further supporting its attractiveness as an investment [26] Investment Strategy - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize upside potential [18][19] - The Style Scores categorize stocks based on investing styles, helping investors identify securities with the highest chances of outperforming the market [8][22]

Core Insights - ResMed, Inc. (RMD) shares have increased by 16.3% since the last earnings report, significantly outperforming the industry average of 1.3% and the medical sector's rise of 3.6% [1] - The company reported better-than-expected earnings and revenues for the third quarter of fiscal 2024, driven by strong demand for its products and software solutions, resulting in double-digit growth in mask and accessories revenue [2] - ResMed's market capitalization stands at $31.33 billion, and it is recognized as a solid wealth creator for investors, holding a Zacks Rank of 2 (Buy) [1][2] Financial Performance - The company achieved a strong bottom line due to ongoing operational efficiencies, which improved margins and profitability [2] - ResMed paid out $70 million in dividends during the fiscal third quarter and repurchased 261,000 shares for $50 million, indicating robust capital management [8] - The company has a historical cash flow growth rate of 12.82%, outperforming the industry average of 5.98% [8] Growth Strategies - ResMed identified three key growth horizons: enhancing its core sleep apnea and respiratory care business, delivering advanced medical devices and scalable digital health solutions, and innovating advanced software solutions for digital care [4] - The company is ramping up demand-generation initiatives to increase awareness and access to care for sleep suffocation across global markets, leveraging both traditional healthcare channels and social media [5] - The myAir app has seen strong adoption, with 7.8 million users by the end of the fiscal third quarter, contributing to better patient outcomes and increased resupply [6] Market Outlook - Earnings for ResMed are expected to grow by 13.2% over the next five years, with recent estimates reflecting analysts' optimism [10] - The Zacks Consensus Estimate for RMD's earnings in 2024 and 2025 has increased by 2.8% and 4.9%, respectively, in the past 90 days [10]

Core Insights - ResMed supported 26 abstracts presented at the American Thoracic Society International Conference, highlighting the effectiveness of PAP therapy in treating sleep-disordered breathing and its cardiovascular health benefits [1][10] Group 1: PAP Therapy and Sleep Disorders - Studies demonstrated that PAP therapy continues to lower risks associated with sleep disorders, with a meta-study showing a 37% lower mortality rate in patients with PAP-treated obstructive sleep apnea (OSA) compared to untreated OSA [3] - An analysis of 17,000 treatment-naïve patients indicated that PAP treatment reduces hospitalization rates over the first four years of treatment, correlating PAP therapy use with reduced healthcare resource utilization [4] Group 2: Prevalence and Future Trends of OSA - Research projected a 27.6% increase in OSA cases in the U.S. by 2050 among individuals aged 30-70, with an overall prevalence of 26% expected in this demographic due to aging and rising BMI trends [5] - The increasing prevalence of OSA is anticipated to drive higher reliance on PAP therapy, which remains the gold standard for treatment [5] Group 3: GLP-1 Receptor Agonists and PAP Therapy - A study found that the use of GLP-1 receptor agonists did not lead to higher discontinuation rates of PAP therapy; instead, patients adhering to GLP-1 medication had higher levels of PAP therapy use compared to non-adherent patients [2][8] Group 4: Adaptive Servo-Ventilation (ASV) Therapy - Studies on ASV therapy showed reduced symptom burden and improved quality of life for patients with treatment-emergent or persistent central sleep apnea (TE-CSA) [6] - Another study indicated that ASV treatment for patients on long-term opioid therapy resulted in a median reduction in Epworth Sleepiness Scale values, demonstrating lower symptom burden and improved quality of life [7] Group 5: Non-Invasive Ventilation (NIV) in COPD - Research involving nearly 50,000 adults with COPD indicated that long-term home use of NIV is strongly associated with a reduced risk of death [9]

Core Insights - ResMed supported 26 abstracts presented at the American Thoracic Society International Conference, highlighting the effectiveness of PAP therapy in treating sleep-disordered breathing and its cardiovascular health benefits [1][10] Group 1: PAP Therapy and Sleep Disorders - Studies demonstrated that PAP therapy significantly lowers mortality rates, with a 37% reduction in patients with obstructive sleep apnea (OSA) who received treatment compared to those who did not [3] - Research indicated that PAP treatment reduces hospitalization rates in OSA patients over the first four years of treatment, correlating with decreased healthcare resource utilization [4] - The prevalence of OSA in the U.S. is projected to increase by 27.6% by 2050 among individuals aged 30-70, with an expected overall prevalence of 26% in this demographic [5][8] Group 2: GLP-1 Receptor Agonists and PAP Therapy - A study found that the use of GLP-1 receptor agonists did not increase discontinuation rates of PAP therapy; instead, patients adhering to GLP-1 medication showed higher levels of PAP therapy use [2][8] Group 3: Adaptive Servo-Ventilation (ASV) Therapy - ASV therapy was shown to reduce symptom burden and improve quality of life in patients with treatment-emergent or persistent central sleep apnea (TE-CSA) [6] - Another study indicated that ASV treatment in patients on long-term opioid therapy resulted in a median reduction in Epworth Sleepiness Scale values, reflecting lower symptom burden and improved quality of life [7] Group 4: COPD and Non-Invasive Ventilation (NIV) - Long-term home use of non-invasive ventilation (NIV) was associated with a significantly reduced risk of death in nearly 50,000 adults with chronic obstructive pulmonary disease (COPD) [9]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on ResMed (RMD), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank for making informed investment decisions [1][4]. Group 1: Brokerage Recommendations - ResMed has an average brokerage recommendation (ABR) of 1.68, indicating a consensus between Strong Buy and Buy, with 57.1% of recommendations being Strong Buy and 14.3% being Buy [2]. - The article highlights that brokerage analysts tend to exhibit a strong positive bias in their ratings, often issuing five "Strong Buy" recommendations for every "Strong Sell" [5][9]. - The interests of brokerage firms may not align with those of retail investors, leading to potential misguidance in stock price movements [6][9]. Group 2: Zacks Rank - The Zacks Rank, which classifies stocks from 1 (Strong Buy) to 5 (Strong Sell), is presented as a more reliable indicator of near-term price performance compared to ABR [7][10]. - The Zacks Rank is based on earnings estimate revisions, which have shown a strong correlation with stock price movements, making it a timely tool for investors [10][11]. - ResMed currently holds a Zacks Rank 1 (Strong Buy) due to a 2.8% increase in the Zacks Consensus Estimate for the current year, reflecting analysts' growing optimism about the company's earnings prospects [12][13].