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Highlights
- ResMed's share price has surged significantly this year.
- Zip Co shares show a remarkable recovery from their lows.
- Both companies operate globally in distinct sectors.
ResMed and Zip Co have shown impressive share price movements in 2024. ResMed's steady growth in the medical equipment industry contrasts with Zip Co's remarkable recovery in the buy-now-pay-later sector, highlighting their strong global presence and sector leadership.
ResMed’s (ASX:RMD)
ResMed has seen a sharp increase of over 40% in its share price since the beginning of 2024. Founded in 1989, the company, initially Australian but now based in San Diego, specializes in providing medical equipment such as cloud-connectable CPAP machines for obstructive sleep apnea (OSA) treatment. While primarily listed on the New York Stock Exchange (NYSE), it maintains a secondary listing on the Australian Securities Exchange (ASX).
Operating in more than 140 countries and employing over 10,000 individuals, ResMed operates two core divisions. The Sleep and Respiratory Care unit is well-known for its advanced CPAP devices that treat various degrees of sleep apnea and respiratory conditions. This division caters to patients ranging from those with mild conditions requiring nighttime therapy to those needing continuous life-support ventilation. The Software as a Service (SaaS) unit complements this by providing software solutions for out-of-hospital care, especially for durable medical equipment (DME) and home medical equipment (HME) providers.
ResMed has created a vast digital health ecosystem with its cloud-connected devices. This enables the company to utilize both its high-quality hardware and software solutions to gather valuable data, which helps drive improved healthcare outcomes while simultaneously reducing costs. This integration of technology is one of the key strengths that has allowed ResMed to maintain its leadership position in the medical devices sector.
Zip Co’s (ASX:ZIP)
Zip Co, a prominent financial technology company, has also made headlines with its significant recovery. Its share price has skyrocketed more than nine-fold from its 52-week low, showing resilience in 2024. Zip, founded in 2013, offers buy-now-pay-later (BNPL) services, which have gained immense popularity among consumers. The platform allows users to make purchases immediately and pay for them over time in interest-free installments.
With over 79,300 retail partners and 6 million customers worldwide, Zip has a notable global footprint. In 2020, the company expanded its reach further by acquiring Quadpay, a US-based BNPL provider, strengthening its position in the North American market.
Valuation of ResMed’s Share Price
ResMed’s price-to-sales ratio currently sits at 5.03x, lower than its five-year average of 8.70x. This could indicate that ResMed shares are trading below historical averages, potentially driven by increased revenue growth over recent years. While this ratio provides one measure of the company’s stock valuation, it is essential to consider multiple factors before drawing conclusions about its market performance.
