ResMed Inc. (RMD), a leading provider of cloud-connected medical devices for sleep and respiratory care, saw its stock price plummet 7.94% in Friday's intraday trading session. The steep decline came after the company reported its second-quarter fiscal 2025 earnings results on Thursday after the market close.
In its Q2 earnings call, ResMed reported solid revenue growth of 10% year-over-year, driven by strong performance across its sleep health, breathing health, and residential care software portfolio. However, despite the topline growth, the company's earnings per share (EPS) missed analysts' expectations, disappointing investors.
According to the earnings call transcript, ResMed's non-GAAP EPS increased by 29% year-over-year, but analysts had likely expected a higher growth rate. The company cited increased investments in research and development (R&D) and sales, general, and administrative (SG&A) expenses as factors impacting its bottom line.
Another potential factor contributing to the stock's decline could be concerns over ResMed's ability to capitalize on emerging trends in the sleep apnea market. While the company highlighted opportunities arising from the growing awareness of sleep health and the introduction of new weight-loss drugs, investors may have been seeking more concrete evidence of ResMed's plans to capture this potential demand.
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