U.S. Markets close in 1 min
  • S&P 500

    -7.57 (-0.22%)
  • Dow 30

    -98.99 (-0.35%)
  • Nasdaq

    -32.52 (-0.28%)
  • Russell 2000

    -11.23 (-0.69%)
  • Crude Oil

    -1.71 (-4.10%)
  • Gold

    +11.40 (+0.60%)
  • Silver

    +0.16 (+0.62%)

    +0.0034 (+0.2847%)
  • 10-Yr Bond

    +0.0190 (+2.38%)
  • Vix

    -0.71 (-2.42%)

    +0.0198 (+1.5274%)

    -0.9220 (-0.8742%)

    +1,628.80 (+14.73%)
  • CMC Crypto 200

    +9.43 (+3.85%)
  • FTSE 100

    -112.72 (-1.91%)
  • Nikkei 225

    +72.42 (+0.31%)

Sleep Apnea Market Gains Momentum: 3 Stocks in Focus

Trina Mukherjee

The market for devices providing solutions for detection and treatment of sleep apnea – a potentially serious sleep disorder – has gained investors’ attention due to the prospects it presents. This market holds huge untapped potential considering the fact that 80% of the cases of moderate and severe obstructive sleep apnea (OSA) are still undiagnosed (American Sleep Apnea Association).

Sleep apnea is common but significant health issue in the United States. OSA, a type of sleep disorder breathing, is much more prevalent compared to central and complex sleep apnea. According to a report on sleep apnea by National Sleep Foundation, there are more than 18 million adults in the United States suffering from this disorder.

Sleep Apnea Devices Market: Lucrative Prospects

According to a report by Medgadget, the global sleep apnea device market accounted for $4.33 billion in 2018 and is anticipated to reach $9.10 billion by 2025 at a CAGR of 11.2%. Interestingly, North America leads the way when it comes to sleep apnea devices market. According to a report by ResearchAndMarkets, the North America sleep apnea devices market is estimated to reach $3.71 billion in 2025 and is expected to see a CAGR of 7.6% from 2018-2025.

Nevertheless, Europe and Asia-Pacific markets are close on the heels of North America. Per a report by Grand View Research, Asia Pacific is touted to be the fastest growing market with a CAGR of 15.2% over the forecast period of 2019-2025. Meanwhile, Europe accounted for the second largest revenue share of around 36.7% in 2018.

Notably, close to 1 billion adults worldwide have mild to severe OSA and around half of them have moderate to severe from of the disease, per a report by Healio. According to the statistics released by Sleep Advisor, 24-31% of men and 9-21% of women suffer from OSA, making it more prevalent in men.

Driving Factors

Rising geriatric population

The increase in the population of the elderly people is one of the primary factors driving the sleep apnea devices market. Moreover, sleep apnea is more pervasive in the aging population due to the other related diseases. According to the data from World Population Prospects: the 2019 Revision, as published by United Nations, by 2050, one in six people in the world will be over age 65 (16%), up from one in 11 in 2019 (9%). Further, one in four persons living in Europe and Northern America could be aged 65 or over by 2050.

Growing Therapeutic Devices Market

In 2018, therapeutic devices market led the overall sleep apnea devices market with a revenue share of 65.1%. Increasing disease awareness among patients and availability of technologically advanced products are the key factors driving this market. Positive Airway Pressure (PAP) devices are considered to be the most common for treatment of sleep apnea. Given the cost efficiency and advanced technology with the availability of customization options, PAP devices are expected to boost market growth from 2019-2025, per the report by Grand View Research. According to the same report, diagnostic device segment is expected to see a CAGR of 6.8% between 2019 and 2025.

Increase in Risk of Other Diseases

Prevalence of sleep apnea rises with the increasing risk of other diseases such as cardiac diseases, hypertension and diabetes. In fact, a strong correlation between OSA and a number of cardiovascular diseases has been observed recently. Per an article by The Sleep Zone, OSA increases the risk of heart failure by 140%, stroke by 60% and coronary heart disease by 30%. Moreover, up to 83% of patients with type 2 diabetes suffer from unrecognized sleep apnea. Consequently, this opens up more avenues for sleep apnea device makers.

3 Stocks Gaining Prominence in Sleep Apnea

Masimo Corporation’s MASI Signal Extraction Technology (SET) has been utilized by clinicians in the detection of sleep apnea. In fact, the company’s SET Measure-through Motion and Low Perfusion pulse oximetry might be a useful initial screening method to identify children with Down Syndrome who are at a high risk of OSA.

This Zacks Rank #2 (Buy) company has a long-term earnings growth rate of 20.5%. For 2019, the Zacks Consensus Estimate for revenues is pegged at $925.8 million, indicating an improvement of 7.9% from the year-ago period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Year to date, Masimo’s shares have gained 41.1%, outperforming the industry’s rally of 14.5%.

ResMed Inc. RMD holds a major position as a designer, manufacturer and distributor in the worldwide market for generators, masks and related accessories for the treatment of sleep-disordered breathing and other respiratory disorders, including OSA and other sleep-related respiratory disorders. In April 2019, the company unveiled its first top-of-head connected nasal pillows mask — AirFit P30i — in the United States. This is the company’s second top-of-head connected Continuous Positive Airway Pressure (CPAP) mask designed to treat sleep apnea.

This Zacks Rank #3 (Hold) company has a long-term earnings growth rate of 10.6%. For fiscal 2020, the Zacks Consensus Estimate for revenues is pegged at $2.86 billion, indicating an improvement of 9.9% from the year-ago period.

Over the past year, ResMed’s shares have gained 17.3%, against the industry’s decline of 0.7%.

Natus Medical Incorporated NTUS – a leading provider of healthcare products – boasts of a Neuro business unit that offers a comprehensive portfolio of sleep solutions. It includes in-lab testing products like Natus SleepWorks Software, Xltek Brain Monitor Amplifier, to name a few.

This Zacks Rank #3 company witnessed its 2019 earnings estimate move upward by 0.8% in the past two months to $1.28 per share.

Over the past six months, shares of Natus Medical have gained 15.7%, against the industry’s decline of 4.6%.


Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Masimo Corporation (MASI) : Free Stock Analysis Report
ResMed Inc. (RMD) : Free Stock Analysis Report
Natus Medical Incorporated (NTUS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research