ResMed (RMD) announced record quarterly revenues and income. Shares are enticing as they trade at a discount to the industry averages.

Company Description

ResMed Inc. is a leading designer, manufacturer and distributor of medical equipment for treating and diagnosing sleep disordered breathing. Sleep disordered breathing includes sleep apnea and related respiratory conditions.

Record-Breaking Income

ResMed announced results for the first quarter of fiscal 2009 that included record revenue and income. Revenue rose 17% year-over-year to $218 million. Net income was $28 million, 16% higher than the same quarter in 2007.

Earnings per share rose 16% to 36 cents. While the reported earnings were 2 cents below analyst estimates, consensus estimates have been increasing across the board.

Estimates on the Rise

Since the earnings announcement, the estimate for next year has jumped 27 cents to $2.12. The current 2008 full year estimate is $1.80, up from $1.70.

Given the estimates above, growth rates for this year and next are 23% and 18%, respectively.

Great Valuations

The stock is currently trading at great valuations, relative to its peer group. Shares are selling for 23 times earnings, much cheaper than the industry average of 40 times.

After taking an 18% growth rate into consideration, the PEG ration is 1.1, compared to an industry average of 1.7.

The Chart

Shares of RMD have been range bound for more than a month. A support level near $30 and resistance near $37 are keeping the shares contained. Take a look at the chart below.

Content Courtesy: Zacks Investment Research

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