Shares of ResMed (RMD +0.39%) were jumping 7% as of 11:25 a.m. ET on Thursday after rising as much as 10.6% earlier in the morning. The solid gain came after the medical device maker announced results for its fiscal 2024 second quarter ended Dec. 31, 2023, following the market close on Wednesday.
NYSE: RMD
Key Data Points
What did investors like about ResMed's fiscal Q2 results?
ResMed reported Q2 revenue of $1.16 billion. This reflected a 12% year-over-year increase and was a little above the consensus Wall Street estimate.
The company posted earnings of $208.8 million, or $1.42 per diluted share, based on generally accepted accounting principles (GAAP). On a non-GAAP (adjusted) basis, ResMed's earnings came in at $277.3 million, or $1.88 per diluted share. This bottom-line amount was 13% higher than adjusted earnings recorded in the prior-year period. It also beat the average analysts' earnings estimate of $1.81 per share.
ResMed CEO Mick Farrell said in the press release announcing the latest results that the company delivered "strong double-digit growth" across the board with its products and services. The company's software-as-a-service (SaaS) revenue soared 24% year over year, largely as a result of ResMed's 2022 acquisition of German hospital software developer Medifox Dan.
Is ResMed stock a good pick to buy now?
ResMed's future appears to be bright. The company is expanding the commercialization of its latest CPAP machine, AirSense 11, into new geographical regions. It remains the clear leader in the sleep-related medical equipment market.
So is ResMed stock a good pick to buy? I like it overall but have one key reservation -- valuation. Shares currently trade at a forward earnings multiple of 24. That's somewhat steep, in my view, considering the level of growth the company is delivering. I think that ResMed could be a good stock to buy on a pullback, but not right now.
