“First quarter results were above expectations, with double-digit top and bottom line gains, improving GPM, expanding operating leverage, and strong cash flow,” Raymond said.
“Strong growth was seen across key geographies and product segments, with masks benefiting from new patient set-ups/resupply/new products, devices supported by S10 and S11 cloud-connected platforms, and the HME channel driving residential software.
“GPM surprised to the upside (yet again), as numerous tailwinds (e.g. manufacturing efficiencies, cost control, higher ASP) offset ongoing freight headwinds, and is expected to gradually improve throughout financial year 2025 (still targeting 59-60%).
“While it is ‘early days’, RMD appears well positioned to leverage growing awareness of sleep conditions, moving upstream in the diagnostic pathway.
“Financial year 2025-2027 earnings increase up to 7.3%, with our target price rising to $41.33.
“We see Resmed (RMD) as an ADD,” Raymond said.
Resmed (RMD)
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