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The ResMed CDI share price has seen a notable increase of 32.3% since the beginning of 2024. In contrast, Woolworths Group Ltd shares are currently tracking 14% above their 52-week lows. Here’s a closer look at these two prominent ASX-listed companies and the factors influencing the growth sector stock movements.
ResMed CDI (ASX:RMD)
ResMed, originally founded in 1989 by Peter Farrell in Australia, is now headquartered in San Diego, California. The company specializes in medical equipment, particularly cloud-connected continuous positive airway pressure (CPAP) machines used for treating obstructive sleep apnea (OSA). For investors, it’s important to note that while ResMed’s primary listing is on the NYSE, its ASX shares are represented as CDIs (CHESS Depositary Interests).
With a global workforce exceeding 10,000 employees and operations in over 140 countries, ResMed operates through two main business units: Sleep and Respiratory Care, and Software as a Service (SaaS). The Sleep and Respiratory Care unit focuses on providing advanced CPAP machines and other respiratory devices. These devices cater to a broad range of needs, from nightly CPAP therapy to life-support ventilation solutions.
The SaaS division offers software that supports durable or home medical equipment (DME/HME), enhancing out-of-hospital care through its extensive digital health network. This network, driven by cloud-connected devices, enables ResMed to utilize its hardware and software data to generate valuable insights, improve patient outcomes, and reduce overall healthcare costs.
Woolworths Group Ltd (ASX:WOW)
Established in 1924, Woolworths is a leading retail operator in Australia and New Zealand, boasting over 3,000 stores and a workforce of more than 100,000 employees. Woolworths is recognized as Australia’s largest company by revenue and market share.
The company’s operations span several areas, including supermarkets under the Woolworths brand in Australia and Countdown in New Zealand. Additionally, it operates discount department stores under the Big W brand and engages in business-to-business (B2B) activities through brands like PFD. Woolworths’ supermarket segment, which holds a dominant 35%+ share of the Australian market, remains a key driver of its business.
For ResMed, one method to estimate the current share price valuation is by examining its price-to-sales ratio. At present, ResMed shares have a price-to-sales ratio of 4.87x. This compares to a five-year average ratio of 7.81x, indicating that the shares are trading below their historical average. While this valuation metric provides useful context, it is important to consider multiple factors and not rely solely on one metric for investment decisions.
Both ResMed and Woolworths have demonstrated resilience and growth potential, reflecting their strong positions within their respective industries. The recent performance of their share prices underscores their ongoing influence in the market and highlights the importance of staying informed about the factors driving their valuations.
