RMD Stock Benefits From the Launch of NightOwl Across US

Resmed Inc. RMD recently launched its home sleep apnea test, NightOwl, across the United States. NightOwl is an FDA-cleared home sleep apnea test (HSAT), designed to offer healthcare providers a simplified, accurate, and efficient way to diagnose obstructive sleep apnea (OSA) from an individual’s home.

HSAT is expected to bolster the company’s core sleep apnea and respiratory care business.  

RMD Stock's Outlook Following the News

Following the announcement, shares of RMD grew marginally 0.3% during the after-market trading session yesterday. Meanwhile, over the past year, RMD’s shares have gained 15.4% compared with the industry’s 11.3% growth. The S&P 500 has increased 10.8% in the same time frame.

The company has been ramping up its demand-generation initiatives to raise awareness and create care pathways for patients suffering from sleep suffocation across specific global markets. The latest launch represents a pivotal step in Resmed’s strategy to deliver life-changing sleep and breathing health technology. Hence, we expect the latest development to boost the market sentiment toward RMD stock.

Resmed presently boasts a market capitalization of $31.33 billion. In the trailing four quarters, it delivered an earnings beat of 6.86%, on average.

Resmed’s NightOwl and Its Features

NightOwl is a disposable HSAT device that records up to 10 nights of sleep data for a single patient, including night-to-night variability and a comprehensive view of an individual’s sleep patterns. Sleep data is transmitted remotely to a cloud-based diagnostic platform for physician analysis and review, facilitating quick interpretation, streamlining diagnostic workflows and helping individuals receive more timely diagnoses. NightOwl utilizes peripheral arterial tonometry technology, a non-invasive method that measures changes in blood flow, oxygen saturation and pulse rate to detect OSA. 

Some of the key features of the NightOwl are its ability to autoscale raw patients with an algorithm that is clinically validated against polysomnography (PSG), saving time for sleep specialists and clinicians, and enhancing diagnostic workflows by integrating leading sleep lab management software. It also eliminates the need for device returns, cleaning, or reprocessing, which reduces operational burdens for healthcare providers. Notably, NightOwl pairs with myAir app, providing individuals with step-by-step guidance throughout the testing process.

Importance of Resmed’s NightOwl

OSA is a sleep disorder where breathing repeatedly stops during sleep due to blocked upper airways. It has affected nearly 1 billion people globally, yet approximately 80% of these cases remain undiagnosed and untreated. Per a recent study published in The Lancet Respiratory Medicine, treating OSA with continuous positive airway pressure (CPAP) therapy can significantly reduce the risk of death. NightOwl makes it easy to detect OSA with a small sensor worn on the fingertip. It is a simple, easy-to-use digital platform for both individuals and healthcare providers. 

Industry Prospects Favor RMD

Per a report by Grand View Research, the global sleep apnea device market was valued at $4.5 billion in 2023 and is expected to witness a CAGR of 6.2% through 2030. The growing geriatric population's vulnerability to sleep apnea is expected to drive the adoption of sleep apnea devices. Furthermore, the entry of new players and an increased focus on innovative product development are driving market expansion, resulting in technologically advanced solutions.

Another Development by RMD

Last month, Resmed unveiled a comprehensive brand evolution to lead the global sleep and health technology revolution. The strategy unifies all Resmed brands under a single health technology brand, aiming to serve millions of consumers and healthcare professionals and underscore the growing direct-to-consumer engagement.

RMD’s Zacks Rank and Key Picks

Resmed currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Cardinal Health CAH. At present, Masimo sports a Zacks Rank #1 (Strong Buy), whereas Boston Scientific and Cardinal Health carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo’s shares have rallied 18.6% in the past year. Estimates for MASI’s 2024 earnings per share (EPS) have increased 1.2% to $4.10 in the past 30 days. MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 17.1%. 

Estimates for Boston Scientific’s 2025 EPS have jumped 2.9% to $2.85 in the past 30 days. Shares of the company have surged 49.5% in the past year compared with the industry’s growth of 10.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%. 

Estimates for Cardinal Health’s fiscal 2025 EPS have increased 1.5% to $7.94 in the past 30 days. Shares of the company have jumped 23.9% in the past year against the industry’s 2.4% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%. 

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This article originally published on Zacks Investment Research (zacks.com).

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