ResMed's New Brightree Suite To Boost Home Infusion Business

Brightree, the wholly owned subsidiary of ResMed Inc. (NYSE:RMD) , recently announced a new and enhanced pharmacy suite, which will cater to home infusion therapy providers and home medical equipment (HME) pharmacies. The company plans to showcase this pharmacy suite at NHIA 2019.

Per ResMed, this improved suite will help optimize business processes of the users by easily meeting compliance requirements and providing them with highest quality patient care. Bringing automation into the home infusion and HME pharmacy work flow, this suite is supposed to create a seamless connection with leading electronic health/medical records (EHR/EMR) and third-party vendors to receive necessary patient data and process medication prescriptions electronically.

Brightree Prospects at a Glance

Significantly, ResMed’s Brightree software-as-a-service business is gradually growing strong. This business has been part of the ResMed Group for three full years, having registered a stable period of success. On the last reported second-quarter fiscal 2019 conference call, ResMed noted that the Software-as-a-Service portfolio continues with its trajectory of excellent growth registering 63% higher revenues year over year, driven by a steady expansion of Brightree and the full quarterly contribution from HEALTHCAREfirst along with partial quarterly benefits from MatrixCare and Apacheta.

While the MatrixCare buyout was closed last November, the technology tuck-in acquisition of Apacheta was completed of late, which bode well for growth in the Brightree business.

Analyzing the HME market prospects, we expect this growth momentum to sustain in the long run. According to an article by Freedonia Group, US demand for home medical equipment in 2018 is likely to gain 8.2% to $12.6 billion, driven by technological advances and cost-containment efforts.

Share Price Performance

In the past three months, shares of ResMed have underperformed its industry. The stock has declined 11% versus the 4.8% growth of the industry.

Zacks Rank and Key Picks

ResMed currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are ABIOMED, Inc., (NASDAQ:ABMD) , Penumbra, Inc., (NYSE:PEN) and Masimo, Inc. (NASDAQ:MASI) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

ABIOMED’s long-term earnings growth rate is expected to be 27.67%.

Penumbra’s long-term earnings growth rate is projected at 20.93%.

Masimo’s long-term earnings are projected to grow 15.60%.

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