ResMed Inc (ASX: RMD) shares have continued their slide on Wednesday.
In morning trade, the sleep treatment company's shares have dropped over 3% to a 52-week low of $23.65.
This means they are now down 35% from their 52-week high.
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Why are ResMed shares at a 52-week low?
There are a couple of reasons why ResMed shares are under pressure at present.
The first was an underwhelming FY 2023 results last month which revealed softer than expected margins.
Also weighing on the company's shares have been concerns over the emergence of weight loss drugs such as Ozempic.
Research shows that 70% of obstructive sleep apnoea (OSA) patients are obese. In light of this, Ozempic is seen as potentially a threat to the sleep treatment industry's growth.
Is this a buying opportunity?
The team at Bell Potter remains very positive on the company and sees major upside ahead for ResMed's shares.
For example, earlier this week, the broker kept the company on its favoured list with a buy rating and a $29 price target. This implies a potential upside of almost 23% for investors over the next 12 months.
The OSA market is growing in the high-single digits and RMD is the largest player, ahead of Philips Respironics. RMD is also expanding in the hospital and home care respiratory ventilation market as well as in-house product development and invests 7% of its revenue into R&D.
The market for OSA and chronic obstructive pulmonary disease (COPD) remains under penetrated, and we expect industry volume growth to continue in the 6-8% range for the foreseeable future. In this regard, the competitive dynamics are very much in favour of RMD due to the Philips recall and improving semiconductor availability.
Overall, this could make recent weakness a great buying opportunity for investors looking for long-term investment options.
