Shares in Resmed CDI [ASX:RMD] are down 0.6% at time of writing, slipping as investors digest the medtech’s fourth quarter results.
And despite the reaction, the figures themselves aren’t too bad.
However, the 40% increase in share price over the past six months clearly suggests investors are expecting growth. Signalling to us that perhaps there was an expectation of bigger gains across the balance sheet.
Let’s talk numbers though…
Double-digit revenue growth fails to satisfy the market
With $876.1 million in revenues for Q4, Resmed had something of a bumper quarter. Delivering a 10% improvement over Q3 on a constant currency basis.
More importantly, it represents a 14% increase of revenue year-on-year. Indicating that the company is making some great strides.
On top of this, net income (profit) was 10% higher year-on-year, climbing to $195.1 million for the quarter.
However, when it comes to their full 12-month performance, investors clearly had reason to be a little pessimistic. Net income for FY21 is likely to only reach $474.5 million; a 24% decline compared to the same time last year.
And while that didn’t stop Resmed from raising their dividend by 8%, it clearly wasn’t enough to tide over investors. At least, for today.
Despite all that, it is hard to deny the stellar year this stock has enjoyed.
As CEO Mick Farrell comments:
‘At this time of incredible demand for ResMed products, we are doing everything we can to increase our manufacturing of sleep and respiratory care devices. Our global team is supporting patients, providers, and physicians with our priority to get products directly into the hands of patients who need therapy most.
‘Looking ahead, we are confident in our ability to grow steadily through our fiscal year 2022 and to deliver for all our stakeholders. We’re driving accelerated adoption of digital health solutions in sleep apnea, COPD, and out-of-hospital care, accelerating our ResMed 2025 strategy. These digital health solutions provide efficiency and lower costs for providers and payers, as well as better quality-of-life and clinical outcomes for patients and physicians, and sustainable growth for all of our ResMed stakeholders.’
So, at the very least, shareholders have to be happy about this outlook. Suggesting that this stock should continue to maintain the strong momentum that has carried it through 2021.
What’s next for Resmed Share Price?
As Farrell has noted, the focus for the company is simply getting more products to market. Because demand doesn’t really seem to be an issue.
So the faster they can churn out these devices, the more money Resmed is likely to bring in. And with their 2025 strategy in place, they’ve clearly got a plan to ensure they can make that happen.
Does that mean you should invest in this stock yourself though?
Well, only you can answer that question. But I don’t think today’s dip is big enough to warrant any real value buying opportunities.
You’d be better off looking into the technicals surrounding the chart. Which is something we can help with!
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Regards,
Ryan Clarkson-Ledward,
For Money Morning
PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here
