The 10-second takeaway
For the quarter ended March 31 (Q3), ResMed beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share increased significantly.
Margins improved across the board.
ResMed logged revenue of $349.1 million. The 11 analysts polled by S&P Capital IQ predicted a top line of $338.9 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $313.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.46. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.41 per share. GAAP EPS of $0.44 for Q3 were 29% higher than the prior-year quarter's $0.34 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 60.3%, 200 basis points better than the prior-year quarter. Operating margin was 22.2%, 180 basis points better than the prior-year quarter. Net margin was 18.5%, 150 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $369.0 million. On the bottom line, the average EPS estimate is $0.46.
Next year's average estimate for revenue is $1.36 billion. The average EPS estimate is $1.65.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 171 members out of 184 rating the stock outperform, and 13 members rating it underperform. Among 59 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 56 give ResMed a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ResMed is outperform, with an average price target of $30.60.
The healthcare investing landscape is littered with also-rans and a few major winners. Is ResMed the right stock for you? Read "Discover the Next Rule-Breaking Multibagger" to learn about a company David Gardner believes will be a phenomenal success over the next few years. Click here for instant access to this free report.
- Add ResMed to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
3 Top Medical Device Stocks to Buy Now
Looking to put money to work in this under-the-radar sector? Here are three top stocks to consider.
ResMed's Sales and Profits Rise
Investors cheer the company's successful start to its fiscal year.
Here's Why ResMed Inc. Stock Spiked Today
Another strong earnings report suggests this company's growth story isn't over yet.