The ResMed Inc (ASX: RMD) share price has come flying out of the gates on Thursday.
In morning trade, the sleep treatment company's shares are up 6.5% to $28.50.
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ResMed share price charges higher on strong update
Investors have been fighting to get hold of the company's shares today after it delivered a second quarter result well ahead of expectations.
As we covered here earlier, ResMed reported a 12% increase in revenue to US$1.2 billion, a 20% lift in non-GAAP operating profit, and non-GAAP diluted earnings per share of US$1.88.
This was ahead of the consensus estimates of revenue of US$1.15 billion and earnings per share of US$1.78.
Commenting on the strong quarter, ResMed's CEO, Mick Farrell, said:
Our second-quarter fiscal year 2024 results reflect strong double-digit growth across our combined device, masks and accessories, and residential care software businesses, as well as cost discipline to support an acceleration in profitability.
Broker reaction
The team at Goldman Sachs was pleased with the result. Commenting on its top line growth, the broker said:
1Q24 revenue of $1,163m was up +11% cc, a deceleration from +15% in 1Q24, but +2% ahead of consensus. As was the case in the last quarter, US growth of +9% exceeded once more by a stronger RoW growth of +12%. SaaS grew +24% (in-line), largely reflective of the Medifox Dan contribution, but also organic growth.
Goldman was also pleased with ResMed's earnings, noting that "EBIT/EPS beat +6%/+4% as gross margins improved further in 2Q (+90bps) and SG&A intensity declines once more."
And while no guidance was provided, the broker highlights that the company is once again stating its belief that GLP-1s like Ozempic are not a threat but actually a positive. It said:
RMD still provides no guidance as expected. Management continues to argue strongly that GLP-1 impacts are positive for: i) patients entering the funnel; and ii) adherence/resupply rates.
Goldman currently has a buy rating and $32.00 price target on the ResMed share price.
