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Here's How Much a $1000 Investment in ResMed Made 10 Years Ago Would Be Worth Today

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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in ResMed (RMD - Free Report) ten years ago? It may not have been easy to hold on to RMD for all that time, but if you did, how much would your investment be worth today?

ResMed's Business In-Depth

With that in mind, let's take a look at ResMed's main business drivers.

ResMed, Inc. holds a major position as designer, manufacturer, as well as a distributor in the worldwide market for generators, masks, and related accessories for the treatment of sleep-disordered breathing (SDB) and other respiratory disorders. SDB includes obstructive sleep apnea (OSA) and other respiratory disorders that occur during sleep.

The company currently has two operating segments, which are the Sleep and Respiratory Care segment (88.2% of total revenues in fiscal 2023) and the Software-as-a-Service ("SaaS") segment (approximately 11.8% in fiscal 2023). In fiscal 2023, the first segment registered 17% revenue growth, while the latter registered 24% revenue growth from fiscal 2022.

Sleep and Respiratory Care includes Device, and Masks and other.

Devices include continuous positive airway pressure ("CPAP"), variable positive airway pressure ("VPAP") and AutoSet systems for the titration and treatment of SDB. During fiscal year 2017, AirMini, the smallest portable CPAP on the market was launched. The company also acquired a line of Chinese-developed and manufactured sleep and ventilation devices with the acquisition of Curative Medical in fiscal year 2016.

Masks and others: This portfolio consist of different masks for SDB treatments like AirFit F20 in the full-face category and the AirFit N20, AirFit N30i, AirTouch N20 etc.

SaaS: Following multiple acquisitions, including Brightree LLC in April 2016, HEALTHCARE first in July 2018 and MatrixCare in November 2018, ResMed operates the SaaS business in the United States and Germany. This includes out-of-hospital software platforms designed to support professionals and caregivers who help people stay healthy at home or in a care setting of their choice.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in ResMed ten years ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in May 2014 would be worth $4,285.69, or a 328.57% gain, as of May 23, 2024, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

The S&P 500 rose 180.42% and the price of gold increased 76.55% over the same time frame in comparison.

Looking ahead, analysts are expecting more upside for RMD.

ResMed benefits from the global supply of its cloud-connected platforms, AirSense10 and AirSense11. The strong uptake of the myAir app with Air 11 is likely to drive higher adherence to therapy in patients. The company continues to see strong growth in the U.S. mask and accessories business, where resupply programs are powered by a digital health ecosystem, including AirView for physicians, Brightree for home care medical equipment providers, and myAir for patients. The MEDIFOX DAN business contributes to the robust organic growth of the SaaS business, raising optimism. We expect the company’s revenues to grow at 6.4% CAGR through fiscal 2024-2026. Meanwhile, ResMed has been witnessing pressure on margin over the past few quarters due to varied macroeconomic issues. A balance sheet with a high debt burden is worrisome.

The stock is up 18.77% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2024. The consensus estimate has moved up as well.

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