ResMed Stock Climbs 25.6% in a Year: What's Driving the Rally?

Core Viewpoint - ResMed has demonstrated significant growth, with a 25.6% increase in share price over the past year, outperforming both the industry and the S&P 500 [1] Company Overview - ResMed is a leading designer, manufacturer, and distributor of generators, masks, and accessories for treating sleep-disordered breathing and respiratory disorders [2] - The company is focusing on the underserved out-of-hospital care market, presenting opportunities for innovation through its software solutions [2] Growth Factors - The increase in share price is attributed to strong demand for ResMed's mask portfolio, particularly following a competitor's recall, and ongoing product development [3] - ResMed has launched a full suite of masks, including the successful AirFit F40 and the new AirTouch N30i CPAP mask [3][4] - Revenues from masks and related businesses grew by 11% year-over-year globally, with a 12% increase in the U.S., Canada, and Latin America [4] - Device sales remain strong, supported by the availability of AirSense 10 and AirSense 11 sleep devices, with plans for further rollout in 2025 [4] - The company is investing in new technologies for treating chronic obstructive pulmonary disease (COPD) and advancing digital health initiatives, including AI-driven capabilities [5] SaaS Business Growth - Strategic acquisitions are enhancing ResMed's SaaS revenues, with MEDIFOX DAN contributing to an 8% year-over-year growth in the fiscal second quarter [6] - The company anticipates sustainable organic growth across its SaaS solutions in home medical equipment and home health sectors [6] Financial Estimates - The Zacks Consensus Estimate projects ResMed's earnings per share (EPS) to increase by 22.7% in fiscal 2025 and 9.4% in fiscal 2026, reaching $9.47 and$10.36 respectively [10] - Revenues for fiscal 2025 are expected to grow by 9% to $5.11 billion, followed by a 7.3$5.48 billion in fiscal 2026 [10]