The ResMed Inc. (ASX: RMD) share price has been a very strong performer over the last 12 months.
Since this time last year the sleep treatment focused medical device company's shares have stormed 43% higher.
Is it too late to buy ResMed shares?
I don't believe it is too late to buy ResMed's shares. In fact, I continue to believe it is one of the best buy and hold options on the local share market.
This is due to its industry-leading masks and software in an obstructive sleep apnoea (OSA) tipped to grow materially over the next decade and beyond.
One leading broker that is also a fan of the company is Goldman Sachs. This morning the broker has reaffirmed its buy rating and $27.00 price target on the company's shares.
Why is Goldman Sachs positive on ResMed?
According to the note, Goldman hosted a call with ResMed's management yesterday and notes that demand for OSA products has remained robust during the pandemic.
Goldman commented: "… we came away from the discussion comforted that the demand profile for OSA masks appears robust (indeed, elevated in many markets due to a heightened appreciation of respiratory care, and facilitated by effective access/distribution through Brightree/resupply)."
While it acknowledges that OSA diagnoses are down year on year, volumes are recovering quickly and are currently at approximately 85% to 90% of last year's levels.
And the broker suspects that things could get better from here due to an unexpected consequence of the pandemic.
It explained: "In our view, an interesting development through this period is the potential for accelerated adoption of home diagnoses. Prior to Covid-19, this pathway constituted c.40% of new patient volumes in the US and, though greater reliance was initially borne out of necessity, the company is now seeing significantly more clinical/payor support than previously, potentially improving the overall penetration story through the mid-term."
So, with research estimating that there could be almost 1 billion people globally with OSA, I feel this development bodes well for its future growth and leaves ResMed well-positioned to be a market beater again over the next decade.
