There are two favorable trends working in the favor of ResMed. First, sleep center beds are expected to grow at a rate of 15%-17% according to an analyst at Wachovia who takes studies of sleep centers and covers medical device companies. Second, sleep apnea is an underdiagnosed, yet extremely serious health issue, that could even cause suffocation.
Competes in a duopoly market alongside Respironics (RESP). The company's products are perceived to be of higher quality than Respironics, because they are more comfortable to wear while sleeping- a key component in improving patient compliance. ResMed products sell at a slightly higher pricing point as a result.
It is highly likely that the company will exit by selling itself to a major medical device company for the right price as the sleep apnea device market matures, making ResMed a strong acquisition candidate going forward.