3 Compelling Reasons Why ResMed (RMD) Is A Top Pick for Growth Investors

Investors always seek growth stocks with exceptional financial performance that can generate substantial returns. However, choosing a suitable growth stock can be challenging, particularly because these stocks come with higher than usual risk and volatility. An incorrect choice, especially if the growth phase is nearing its completion, may lead to notable financial setbacks.

Nonetheless, assessing a company's true growth potential can be simplified using analytical systems that delve deeper into growth metrics. ResMed (RMD), a company specializing in medical devices for respiratory conditions, stands out with promising growth indicators, making it a recommended investment by such analysis systems.

Remarkable Earnings Growth

An essential indicator of potential stock success is earnings growth. Investors are typically drawn to companies displaying a sharp increase in profits. ResMed, recognized for its strong growth figures, expects an impressive 19.6% increase in EPS this year, significantly outpacing the industry's average expectation of 13.8%.

Noteworthy Cash Flow Expansion

The lifeblood of any company is its cash flow, and for growth companies, robust cash flow growth is vital. This allows them to scale their operations without the need for costly external financing. ResMed's year-over-year cash flow growth stands at 9.8%, outperforming the industry average decline of -13.8%. Looking at the company's historical cash flow growth provides further context, with an annualized rate of 12.8% over the past three to five years, which surpasses the industry average of 6%.

Positive Earnings Estimate Revisions

Another indicator of a company's growth potential is the trend in earnings estimate revisions. Positive adjustments in earnings estimates are a favorable sign and are often correlated with short-term stock price movements. Recently, ResMed has enjoyed an upward trend in its earnings estimates, with a notable consensus estimate increase of 0.7% over the last month.

Given its impressive Growth Score and the recent positive revisions in earnings estimates, ResMed holds a promising position as a strong candidate for generating growth in investor portfolios. Its attractive combination of a high Growth Score and a positive Zacks Rank further solidifies ResMed as a company poised to excel and offer rich returns to growth-oriented investors.

ResMed, Growth, Investment