RMD retreated 4.3% on Monday, its largest decline since April, after the sleep apnoea business reported 1Q results. The main issue was that organic growth slowed, marking the 3rd consecutive quarter of slowing organic growth rates.
- Revenue of $1.34bn, up +9.1% YoY, slightly ahead of $1.33bn estimates.
- Adjusted EPS $2.55 vs $2.20 YoY, above $2.52 estimates.
- Adjusted gross margin of 62% vs 59.2% YoY, and above 61.2% estimates.
This is a top-quality business, but it’s priced for growth, trading on 22.6x, and on the day, the result wasn’t enough. We thought the result was actually ok, and if RMD gets dragged down towards its 2025 lows, it’s likely to be promoted onto the MM Hitlist.
- We can see the fresh downside momentum taking RMD back under $35, initially 8-10% lower.
MM is now adopting a neutral stance towards RMD
Add To Hit List
