The ASX Ltd (ASX:ASX) share price is up 6.2% since the start of 2024. Meanwhile, the Resmed CDI (ASX:RMD) share price is 2.4% away from its 52-week high.
ASX share price in focus
ASX Limited operates Australia’s primary national securities exchange. This includes the provision of securities exchange services, derivatives exchange services, central counterparty clearing services, and registry, settlement, and delivery-versus-payment clearing financial products.
The company provides access to a variety of different products, including shares, futures, exchange traded funds (ETFs), managed funds, and real estate investment trusts (REITs).
ASX operates at the heart of the Australian financial markets. It oversees compliance for listed companies and aims to promote a high standard of corporate governance and a fairer playing field for retail investors.
While it may be large, ASX Ltd is a growth stock, and so it requires a different set of rules and may not be simple to value at times. Studies have shown that over 5-10+ years, it’s top-line revenue growth which explains a stock’s performance. That’s why it’s good to see ASX Ltd is able to grow revenue at 15.8%, a good clip.
RMD shares
ResMed was founded in 1989 by Peter Farrell in Australia but is now based in San Diego, California. It is a medical equipment company that provides cloud-connectable continuous positive airway pressure, or CPAP, machines for the treatment of obstructive sleep apnea (OSA). Because of its US home base, ResMed shares have their primary listing on the NYSE but are also listed on the ASX.
ResMed operates on a global scale, with 10,000+ employees and a presence in over 140 countries. It has two primary business units: Sleep and Respiratory Care, and Software as a Service (SaaS). Within Sleep and Respiratory Care, ResMed provides industry-leading CPAP machines for sleep apnea. The Respiratory Care unit covers patients ranging from those who only require therapy from CPAP systems at night to those who are dependent on non-invasive or invasive ventilation for life-support. Within the SaaS unit ResMed provides software that assists durable or home medical equipment (DME/HME). Basically, it assists in out-of-hospital care.
Due to ResMed’s large digital health network powered by its cloud-connected devices, ResMed can leverage its industry-leading hardware (e.g. masks and humidifiers) and its SaaS data to drive insights, improve outcomes and reduce overall healthcare costs.
ASX share price valuation
As a growth company, some of the trends we would be looking for from ASX include revenue growth, profit growth, and return on equity (ROE). Since 2021, ASX has grown revenue at a rate of 15.8% per year to reach $1,581m in FY24. Over the same time period, net profit has fallen from $481m to $474m. ASX last reported a ROE of 12.9%.
Over the last 3 years, RMD has increased revenue at a rate of 13.6% per year to hit $4,685m in FY24. Meanwhile, net profit has risen from $475m to $1,021m. RMD’s last reported ROE was 22.7%.
Please keep in mind that context is important – these metrics give us some indication of company performance, but we need a lot more info to work out the value of ASX or RMD shares. To learn more about valuation, I’d recommend signing up for one of our free online investing courses.
