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ResMed Inc. (RMD) Hit a 52 Week High, Can the Run Continue?
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A strong stock as of late has been ResMed (RMD - Free Report) . Shares have been marching higher, with the stock up 4.5% over the past month. The stock hit a new 52-week high of $268.65 in the previous session. ResMed has gained 16.9% since the start of the year compared to the -5.2% move for the Zacks Medical sector and the 4.6% return for the Zacks Medical - Products industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on April 23, 2025, ResMed reported EPS of $2.37 versus consensus estimate of $2.36.
For the current fiscal year, ResMed is expected to post earnings of $10.47 per share on $5.12 in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $11.35 per share on $5.51 in revenues. This represents a year-over-year change of 10.17% and 7.53%, respectively.
Valuation Metrics
While ResMed has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
ResMed has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 25.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 19.1X. On a trailing cash flow basis, the stock currently trades at 29X versus its peer group's average of 10.2X. Additionally, the stock has a PEG ratio of 1.67. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, ResMed currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if ResMed fits the bill. Thus, it seems as though ResMed shares could have potential in the weeks and months to come.
How Does RMD Stack Up to the Competition?
Shares of RMD have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Phibro Animal Health Corporation (PAHC - Free Report) . PAHC has a Zacks Rank of #1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Phibro Animal Health Corporation beat our consensus estimate by 21.15%, and for the current fiscal year, PAHC is expected to post earnings of $2.30 per share on revenue of $1.28 billion.
Shares of Phibro Animal Health Corporation have gained 18% over the past month, and currently trade at a forward P/E of 12.74X and a P/CF of 13.83X.
The Medical - Products industry may rank in the bottom 70% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for RMD and PAHC, even beyond their own solid fundamental situation.
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ResMed Inc. (RMD) Hit a 52 Week High, Can the Run Continue?
A strong stock as of late has been ResMed (RMD - Free Report) . Shares have been marching higher, with the stock up 4.5% over the past month. The stock hit a new 52-week high of $268.65 in the previous session. ResMed has gained 16.9% since the start of the year compared to the -5.2% move for the Zacks Medical sector and the 4.6% return for the Zacks Medical - Products industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on April 23, 2025, ResMed reported EPS of $2.37 versus consensus estimate of $2.36.
For the current fiscal year, ResMed is expected to post earnings of $10.47 per share on $5.12 in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $11.35 per share on $5.51 in revenues. This represents a year-over-year change of 10.17% and 7.53%, respectively.
Valuation Metrics
While ResMed has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
ResMed has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 25.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 19.1X. On a trailing cash flow basis, the stock currently trades at 29X versus its peer group's average of 10.2X. Additionally, the stock has a PEG ratio of 1.67. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, ResMed currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if ResMed fits the bill. Thus, it seems as though ResMed shares could have potential in the weeks and months to come.
How Does RMD Stack Up to the Competition?
Shares of RMD have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Phibro Animal Health Corporation (PAHC - Free Report) . PAHC has a Zacks Rank of #1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Phibro Animal Health Corporation beat our consensus estimate by 21.15%, and for the current fiscal year, PAHC is expected to post earnings of $2.30 per share on revenue of $1.28 billion.
Shares of Phibro Animal Health Corporation have gained 18% over the past month, and currently trade at a forward P/E of 12.74X and a P/CF of 13.83X.
The Medical - Products industry may rank in the bottom 70% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for RMD and PAHC, even beyond their own solid fundamental situation.