The stock has held well in this turbulent market until today. A reminder that a small portion of Resmed’s portfolio is the sale of ventilators (Resmed sells a type of ventilator that can be used in hospital settings), but they mostly market sleep apnea/COPD respiratory masks and devices (different machines than ventilators).
Here’s a perspective on why the stock is moving so much today:
ResMed notes it has not seen sleep apnea demand materially affected to date by COVID-19 but it could still see a slowdown in new patient diagnosis. While a near term drop in new sleep patient setups is possible, we think the long-term thesis of RMD is not affected.
On the positive side:
AA Homecare has sent a letter to CMS on recommendations in light of COVID-19, requesting delaying the implementation of the Competitive Bidding program for one year and suspending all audits to allow suppliers to focus on emergency activities. This would be positive for ResMed if implemented but would have few implications for near term demand.
Julie S. Praline
Director, Equity Analyst
Direct: 617.226.0025
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square
Suite 500
Boston, MA 02109