Investors in ResMed CDI (ASX: RMD) have enjoyed a stellar run over the past twelve months.
Shares in the ASX 200 healthcare stock have climbed from $33.71 apiece a year ago to $43.71 per share at the time of writing.
This equates to a welcome 30% return for shareholders.
In comparison, the All Ordinaries Index (ASX: XAO) advanced by 13.5% during the same period.
So, what caused ResMed shares to handsomely outperform the broader market?
As it turns out, a recent catalyst for the rally came with the release of the group's FY25 results on the first day of August.
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What happened?
ResMed's revenue in FY25 jumped by 10% year over year, helping to drive a 19% lift in operating profit.
Its gross margin also improved by 270 basis points to reach 59.4%, supporting a 28% increase in income from operations.
And investors welcomed the news.
The company's shares hit an all-time high on results day and rallied further to reach a new record of $45.01 per share in the days that followed.
Fast forward to today, and shares in this ASX 200 healthcare stock continue to trade near record peaks.
But one expert believes the party could just be getting started.
Global leader in sleep disorder treatment
ResMed develops devices and software to treat sleep apnea, chronic obstructive pulmonary disease (COPD), and other respiratory conditions.
Overall, the company's products are sold in more than 140 countries.
Its product range includes CPAP machines, masks, and cloud-connected monitoring tools, which help patients breathe and allow healthcare professionals to monitor treatment effectiveness.
All up, ResMed generated US$5.1 billion in revenue in FY25, with the US, Canada, and Latin America accounting for 58% of the total.
More fuel left in the tank?
Alphinity Investment Management is a Sydney-based investment firm managing $34 billion in assets.
Its research-driven approach to investing aims to detect companies at optimal points in their earnings cycles, with a view to building a diversified and flexible portfolio.
In this respect, Alphinity sees Australia's healthcare sector as particularly compelling.
And ResMed is one ASX 200 healthcare stock to catch the firm's eye.
More specifically, client portfolio manager Elfreda Jonker believes that ResMed shares offer the most near-term upside out of all the stocks held by the fund.
She points to the group's earnings momentum, driven by strong product demand and margin expansion as ResMed scales its operations and launches new offerings.
Ms Jonker noted that ResMed's significant investment in research and development may help sustain the group's earnings upgrade cycle in the long term, whilst also strengthening its competitive moat.
In turn, ResMed shares could be poised to deliver healthy returns for investors well beyond the recent record highs.
