ResMed's Q4 Results: Analysts Say Uncertain Market Dynamics Follow Amid Philips Re-Entry

ResMed Inc RMD posted Q4 adjusted EPS of $1.60, up from $1.49 a year ago, missing the consensus of $1.67.

Revenues increased 23% to $1.12 billion, in line with consensus, driven by increased demand for sleep and respiratory care devices and reduced competitive supply.

Adjusted gross margin decreased by 200 basis points, mainly due to unfavorable product mix and higher component and manufacturing costs.

KeyBanc reiterates the Overweight rating but lowers the price target to $260, citing that investors may view 4Q results somewhat unfavorably, given subdued margin trends. 

The analysts Matthew Mishan, Brett Fishbin, and Elizabeth Bui say the company is near a trough for profitability, mix, and Philips PHG uncertainty. 

Needham keeps the Hold rating on the stock and says how long Philips will be out of the flow generator market is unclear.

The analysts Mike Matson, Joseph Conway, and David Saxon expect PHG could reenter the market as soon as C2H23 or its FDA consent decree could keep it out of the market for several more years. 

If Philips reenters the market in the near term, analysts expect ResMed's growth could slow as Philips recaptures some of its former market share.

William Blair analysts Margaret Kaczor and Macauley Kilbane say that despite the margin miss this quarter, fundamental top-line tailwinds are to come as supply improves and its commercial efforts around masks continue to take hold. It reiterated Outperform rating on the stock.

Price Action: RMD shares are down 17.20% at $182.01 on the last check Friday.