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The Resmed CDI share price has seen a notable increase of 28.6% since the beginning of 2024. In contrast, the Pilbara Minerals Ltd share price, an ASX growth stock, is currently 43% below its 52-week high. This article explores the current performance and valuation of these two prominent companies.
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-connectable continuous positive airway pressure (CPAP) machines used for treating obstructive sleep apnea (OSA). Despite its Australian origins, Resmed’s ASX shares are classified as CDIs, with its primary listing on the NYSE.
Resmed operates on a global scale with over 10,000 employees and a presence in more than 140 countries. The company is divided into two main business units:
- Sleep and Respiratory Care: This unit focuses on providing CPAP machines for sleep apnea and offers devices for patients needing non-invasive or invasive ventilation. CPAP remains the most effective therapy for all severities of OSA.
- Software as a Service (SaaS): This unit supports durable or home medical equipment (DME/HME) and enhances out-of-hospital care through its digital health network, powered by cloud-connected devices.
The company’s large digital health network enables it to leverage its industry-leading hardware and SaaS data to generate valuable insights, improve patient outcomes, and lower overall healthcare costs.
Resmed CDI is classified as a growth stock, which means its valuation can be challenging to determine. Typically, long-term revenue growth is a key indicator of a growth stock's performance. For Resmed CDI, the company’s revenue growth rate of 12.6% indicates robust performance and aligns with its growth trajectory.
Pilbara Minerals Ltd (ASX:PLS)
Pilbara Minerals Ltd is a leading player in the lithium sector and is known for owning the world’s largest independent hard-rock lithium operation, Pilgangoora. Acquired in 2014, Pilgangoora has positioned Pilbara as a major force in the global lithium market.
The company’s core business involves the exploration, extraction, and sale of spodumene concentrate, a key component for lithium-ion batteries. Pilbara Minerals markets its concentrate through both offtake agreements and spot sales on platforms like the Battery Material Exchange (BMX). Notable offtake partners include Great Wall Motors from China and POSCO from South Korea.
Despite its achievements, Pilbara Minerals faces challenges typical of the commodities sector, such as volatility in the price of spodumene. Nevertheless, the company is often viewed as a ‘pure play’ on the increasing demand for electric vehicles and battery technology.
To gauge the valuation of Resmed CDI, one approach is to examine its price-to-sales ratio. Currently, the price-to-sales ratio for Resmed CDI stands at 5.02x. This is below its 5-year average of 7.81x, suggesting that the shares are trading at a lower valuation compared to their historical average. However, it is important to consider that this is just one method of valuation and should be used in conjunction with other metrics for a comprehensive assessment.
Resmed CDI has demonstrated significant growth in 2024, supported by its strong revenue performance and global presence. On the other hand, Pilbara Minerals Ltd continues to be a major player in the lithium market, despite facing price volatility. Understanding the performance and valuation of these companies can provide valuable insights for investors evaluating their investment options.
