The ResMed Inc (ASX: RMD) share price has surged more than 26% since mid-June and is currently trading at record highs. With the coronavirus outbreak in Victoria and fears of a 'second-wave' spreading around the country, the medical device company has seen renewed interest.
A leader during the coronavirus pandemic
ResMed has emerged as a leader during the coronavirus pandemic, which has seen the company's share price make stellar gains for the year. The company saw a surge in demand for its invasive and non-invasive ventilators at the height of the pandemic.
In the three months to 31 March, ResMed tripled its ventilator production, producing more than 52,000 units in order to fulfil an urgent contract from the Australian Government. The company went on to provide around 5,500 invasive and non-invasive ventilators to Australia's national stockpile.
In addition, ResMed was one of the six companies named to help facilitate the production and supply of ventilators in the United States after the country initiated its Defence Production Act.
How has ResMed performed?
In late April, ResMed announced its results for the third quarter of 2020 which was highlighted by a 16% increase in revenue of $769.5 million. ResMed also reported a 39% increase in net operating profit and GAAP gross margin of 58.4% for the quarter.
The company's management noted that the coronavirus pandemic resulted in ResMed rapidly pivoting its business in order to accommodate for the production of life support ventilators and mask systems. Despite the surge in demand for masks and ventilators, ResMed saw a decline in new patient diagnoses for its core sleep apnea devices as many people avoided visits to hospitals.
Is it too late to buy at today's ResMed share price?
With fears of a second wave of coronavirus infections emerging in Australia, the ResMed share price could see further upside as demand for ventilation treatments and respiratory humidifiers increases. In my opinion, demand will not only be limited to Australia as COVID-19 cases continue to surge in other countries.
Brazil, India and South Africa have large populations and ResMed could see substantial demand from these countries as cases continue increasing. In addition, with the winter season approaching in the US, the country could see a more pronounced second wave which could fuel more demand.
ResMed has been a successful Australian company for many years and in my opinion can still deliver double-digit growth despite being at record highs. Another company to keep an eye on is Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) which could also see renewed demand.
