ResMed CDI (ASX: RMD) Sees Strong 2024 Performance: A Closer Look

2 min read | September 16, 2024 06:10 PM AEST | By Team Kalkine Media

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ResMed CDI (ASX: RMD) Sees Strong 2024 Performance: A Closer Look — Image source: Shutterstock

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The share price of ResMed CDI (ASX:RMD) has surged by 45.3% since the beginning of 2024. This substantial increase has drawn attention to the company’s performance and potential.

RMD Share Price Overview

Founded in 1989 by Peter Farrell, ResMed originally started in Australia but is now headquartered in San Diego, California. The company specializes in medical equipment, particularly cloud-connected continuous positive airway pressure (CPAP) machines designed to treat obstructive sleep apnea (OSA). ResMed, an ASX healthcare stock, is listed on both the NYSE and ASX, reflecting its international presence.

Operating in over 140 countries with a workforce of more than 10,000 employees, ResMed has two main business units: Sleep and Respiratory Care, and Software as a Service (SaaS). The Sleep and Respiratory Care unit provides advanced CPAP machines and life-support ventilation for various patient needs. The SaaS unit offers software to support durable and home medical equipment, enhancing out-of-hospital care.

Healthcare Sector Appeal

The S&P/ASX200 Healthcare Index (ASX:XHJ) has delivered a return of 4.94% annually over the past five years, outperforming the broader ASX sectors, which averaged 3.89% over the same period. This highlights the healthcare sector's resilience and growth potential.

Healthcare spending is considered essential, often remaining stable even during economic downturns. This consistent revenue stream is a key factor in the sector's attractiveness, particularly during periods of economic uncertainty.

Growth Potential and Ethical Investing

The US, a major player in global healthcare, is projected to see a 7% annual increase in healthcare profits from 2022 to 2027, reaching an estimated US$819 billion. Within the sector, IT and SaaS solutions are expected to grow at more than 15% annually from 2024 to 2030.

There is also a growing trend towards ethical and sustainable investing. A recent survey revealed that many investors are increasing their focus on sustainable investments in 2024. Healthcare companies like ResMed, which offer critical public services, could benefit from this shift.

RMD Share Price Valuation

Currently, ResMed CDI shares have a price-to-sales ratio of 5.21x, compared to a 5-year average of 6.13x. This suggests that the shares are trading below their historical average. However, this is just one valuation measure, and investment decisions should consider multiple factors.

The strong performance of ResMed CDI in 2024, combined with the broader healthcare sector’s growth prospects, makes it a notable entity in the ASX market.

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