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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Resmed Inc. (XNYS:RMD) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RMD
Name:
RESMED INC. (XNYS:RMD)
Sector:
- 97450.00K
Industry:
Medical Instruments & Supplies
CEO:
Mr. Michael Farrell
Total Employees:
8,160
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1659.49% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RESMED INC.(RMD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND MEDICAL INSTRUMENTS & SUPPLIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
215.98
One Month Price Target:
$216.59
Six Month Price Target :
$219.63
Likely Price in One Year's Time:
Ticker:
$223.28
Likely Trading Range Today Under (Normal Volatility)
$215.29
Price Upper limit ($) :
$217.01
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$205.77
This week:
$193.15
This month :
$170.31
Other Primary facts
Market Cap:
32.31B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
146.43M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.04%
-15.99%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$263.33
$241.42
$168.63
$190.54
Medium risk (<10%) entry points
Buy Call
Sell Call
$234.28
Buy Put:
Sell Put:
$229.60
$197.62
$202.36
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RMD
Sharpe Ratio:
3.05%
Comparison:
RMD, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 90.38% higher than the industry
& ratio is 33.74% higher than the market/S&P 500 average
Average Returns/Yield of
RMD
Daily returns:
0.08%
Weekly returns:
0.40%
Monthly returns:
1.60%
Yearly returns:
14.68%
Comparison of returns:
Average annual returns/yield (last 3 years) is 31.12% above industry average
Classification:
RMD, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.82
Statistical test of Returns:
RMD has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.34%
Weekly Volatility:
5.23%
Monthly Volatility:
10.47%
Yearly Volatility:
36.27%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.78%
Volatility in last five trading days has been -66.88% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.73%
Weekly VaR:
-10.57%
Monthly VaR:
-21.14%
How Much Can the price of
RMD
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-73.24%
This translates to price declining to:
$177.59
This translates to price declining to:
$57.79
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
RMD is a 49.23% riskier investment compared to the market/S&P 500 & is 27.84% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -19.36% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RMD
Beta in relation to market/S&P 500--0.50
Expected beta in 1 year's time:
1.199
Expected beta in 3 year's time:
1.696
Unlevered (debt free) Beta:
0.404
Beta in relation to Nasdaq (XNAS):
0.787
Beta in relation to all global stocks::
0.778
Beta Comparison & Analysis
Beta of competitors/peers::
0.926
Beta is -45.63% lower than peers
Average Industry Beta:
0.989
Beta is -49.14% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.56%
Sustainable growth rate is -34.98% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.127
Alpha is 166.08% above industry average alpha yield
Alpha is 806% higher than market/& is unsustainably high
Analysis of Cost of Capital of
RMD
Equity cost of capital:
0.066
Equity cost of capital is -33.54% below industry mean WACC
Unlevered (without debt) cost of capital:
5.30%
Before-tax cost of debt:
1.14%
After-tax cost of debt:
0.90%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.90%
WACC is -37.50% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$23.48
Revenue growth rate per share of (3Y):
10.45
Annual revenue growth rate is -32.93% below industry average
EPS:
$5.31
Expected Annual growth rate of EPS (3Y):
7.85%
Expected future EPS growth rate is -32.13% lower than the Medical Instruments & Supplies industry
Free cash flow (FCF) per share:
$2.40
Balance sheet equity growth per share: 11.65%
Equity growth rate per share is 4398.96% higher than the industry
Debt per share
$6.25
EBITDA per share
$7.97
Valuation Analysis Today of
RMD
P/E Ratio:
40.73
P/E Ratio of Competitors/Peers:
41.52
P/E ratio is -1.91% lower than main peers & is -18.36% lower than the industry
Stock price/value with industry average P/E ratio: $264.91
RMD is -18.47% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $49.28
Present value of the expected future dividends only: $29.05
P/S (Price to Sales ratio):
9.2
Price to sales ratio is 24.03% above the industry mean
P/B (Price to book value ratio):
10.45
Price to free cash flow: 89.85
-
Net income growth rate (3Y):
47.72%
Net income growth rate is -145.16% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.85%
Dividend yeild: 0.78%
Previous Dividend: $0.42
Previous adjusted dividend: $0.42
Previous Dividend: $1.68
Expected next dividend best case: $0.43
Expected next dividend worst case: $0.41
Average dividend payment (long-term): $0.40
Average dividend increase/decrease (growth rate) % per period: 0.77%
Expected next dividend payment date: 14/09/2022
Expected next dividend record date: 08/10/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 16/06/2022
Previous dividend record date: 05/12/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-11--$0.42
2021-11-09--$0.42
2021-05-12--$0.39
2022-02-09--$0.42
2021-08-18--$0.42
2021-02-10--$0.39
Dividend growth rate is -138.98% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
30.24%
Net debt to equity ratio:
22.27%
Debt to assets ratio:
19.35%
Net debt to assets ratio:
14.25%
Debt-to-asset ratio is -46.09% below industry average
Ability to repay debt:
Interest coverage ratio:
107.98
Interest coverage ratio is 52.22% more than industry average
Looking forward:
Debt growth rate:
-38.91%
Annual debt growth is -135% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.646
Statistical significance of correlation:
RMD has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.505
Stock price is 28.02% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.505
Correlation of price movement with Nasdaq (^IXIC):
-0.009
Covariance of price movement with the market:
-0.012
Kurtosis
11.608
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.361
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RMD
Gross Profit Margin Ratio:
125%
Operating Profit Margin Ratio:
28.69%
Operating profit margin is 114.35% higher than the industry
Net Profit Margin Ratio:
125%
Effective Tax Rate:
18.94%
Effective tax rate is -42.37% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.76%
Return on equity (ROE) is -156.49% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
16.48%
Return on assets (ROA) is 130.13% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
2.54
Current ratio is -30.40% below industry average
Cash Conversion Cycle (days):
51.5
Cash conversion cycle is -2.29% below industry average
The remaining useful life of property plant & equipment is: 4.5 years
Stock based compensation to net income ratio:
2.22%
In-depth Efficiency Analysis
Revenue generated per employee:
421.4K
Each employee generates 19% more revenue than industry average revenue per employee
EBITDA generated per employee:
143.0K
Each employee generates 28% more EBITDA than industry average revenue per employee
Profit generated per employee:
95.5K
Each employee generates 23% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 11.9K
Each employee generates 108% more free cash flow than industry average revenue per employee
Assets/Capital per employee
385.2K
Each employee generates 108% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 11.56%
Growth rate in R&D investment/expenditure is 4363.31% higher than the industry
Competitors/Peer firms of
RMD
METTLER-TOLEDO INTERNATIONAL INC. (XNYS:MTD)
VEEVA SYSTEMS INC. (XNYS:VEEV)
Koninklijke Philips NV (XNYS:PHG)
Alcon Inc. (XNYS:ALC)
WEST PHARMACEUTICAL SERVICES, INC. (XNYS:WST)
AMERISOURCEBERGEN CORPORATION (XNYS:ABC)
LABORATORY CORPORATION OF AMERICA HOLDINGS (XNYS:LH)
ZIMMER BIOMET HOLDINGS, INC. (XNYS:ZBH)
Takeda Pharmaceutical Company Limited (XNYS:TAK)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�8%
Sell�13%
Strong sell�4%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.44B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.27B
1.17B
249.13M
-
725.97M
-
30.88M
1.01B
59.00K
10.81M
194.51M
1.17B
986.53M
779.48M
961.60M
182.13M
779.48M
Statement of Cash Flow
Date:
Period:
47.62M
Differed Income Tax :
- 14391.00K
Stock Based Compensation :
17.30M
Change in Working Capital :
- 329966.00K
Accounts Receivables:
33.70M
Other Working Capital:
962.10M
Other Non-Cash Items:
10.17M
Net Cash Provided by Operating Activities:
- 65657.00K
Investments in PP&E:
- 27340.00K
Net Acquisitions:
-
Purchases of Investments:
- 10081.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
9/30/21
2022
Q1
276.15M
-
276.15M
575.55M
506.64M
227.91M
1.59B
601.72M
1.92B
375.40M
-
80.77M
162.99M
3.14B
-
4.73B
173.70M
34.92M
28.91M
112.53M
303.02M
624.16M
915.19M
59.23M
1.08B
-
1.70B
583.00K
3.22B
- 217003.0K
20.41M
September 30, 2021 at 6:00:00 AM
3.28B
3.03B
4.73B
-
950.11M
674.0M
-
- 4453.00K
- 41874.00K
-
4.35M
-
- 61189.00K
149.81M
92.97M
- 4568.00K
- 19129.00K
276.15M
295.28M
- 65657.00K
- 31793.00K
- 97450.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
RMD
2023
2024
2025
2026
2027
$257.31
$266.01
$275.00
$284.30
$293.92