Will ResMed Inc.’s (NYSE:RMD) Earnings Grow In The Year Ahead?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
As ResMed Inc. (NYSE:RMD) released its earnings announcement on 31 December 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 8.6% next year compared with the past 5-year average growth rate of 0.2%. Currently with trailing-twelve-month earnings of US$316m, we can expect this to reach US$343m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for ResMed
How will ResMed perform in the near future?
Over the next three years, it seems the consensus view of the 17 analysts covering RMD is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of RMD’s earnings growth over these next few years.
From the current net income level of US$316m and the final forecast of US$425m by 2022, the annual rate of growth for RMD’s earnings is 9.7%. EPS reaches $4.09 in the final year of forecast compared to the current $2.21 EPS today. Margins are currently sitting at 13%, approximately the same as previous years. With analysts forecasting revenue growth of 0.32196 and RMD’s net income growth expected to roughly track that, this company may add value for shareholders over time.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For ResMed, I’ve compiled three essential 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.
