Yahoo Finance What Do Analysts Think About ResMed Inc’s (NYSE:RMD) Growth?
In June 2018, ResMed Inc (NYSE:RMD) released its earnings update. Generally, analysts seem highly optimistic, as a 56.80% rise in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 3.89%. With trailing-twelve-month net income at current levels of US$315.59m, we should see this rise to US$494.85m in 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for ResMed in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for ResMed
What can we expect from ResMed in the longer term?
Longer term expectations from the 17 analysts covering RMD’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for RMD, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$315.59m and the final forecast of US$614.73m by 2021, the annual rate of growth for RMD’s earnings is 15.76%. EPS reaches $4.39 in the final year of forecast compared to the current $2.21 EPS today. The primary reason for earnings growth is due to cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, RMD’s profit margin will have expanded from 13.49% to 20.27%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For ResMed, I’ve compiled three fundamental factors you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is ResMed worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ResMed is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ResMed? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
