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Merit Medical (MMSI) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Merit Medical Systems (MMSI - Free Report) ? Shares have been on the move with the stock up 20.7% over the past month. The stock hit a new 52-week high of $54.17 in the previous session. Merit Medical Systems has gained 65.3% since the start of the year compared to the -4.9% move for the Zacks Medical sector and the 5.5% return for the Zacks Medical - Dental Supplies industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 28, 2020, Merit Medical reported EPS of $0.42 versus consensus estimate of $0.19.
For the current fiscal year, Merit Medical is expected to post earnings of $1.28 per share on $937.95 million in revenues. This represents a -12.33% change in EPS on a -5.72% change in revenues. For the next fiscal year, the company is expected to earn $1.77 per share on $1.05 billion in revenues. This represents a year-over-year change of 38.28% and 11.6%, respectively.
Valuation Metrics
Merit Medical may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Merit Medical has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 40.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.2X versus its peer group's average of 14.9X. Additionally, the stock has a PEG ratio of 3.36. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Merit Medical currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Merit Medical meets the list of requirements. Thus, it seems as though Merit Medical shares could have a bit more room to run in the near term.
How Does Merit Medical Stack Up to the Competition?
Shares of Merit Medical have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including AmerisourceBergen , Laboratory Corporation of America Holdings (LH - Free Report) , and Thermo Fisher Scientific (TMO - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 40% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Merit Medical, even beyond its own solid fundamental situation.
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Merit Medical (MMSI) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Merit Medical Systems (MMSI - Free Report) ? Shares have been on the move with the stock up 20.7% over the past month. The stock hit a new 52-week high of $54.17 in the previous session. Merit Medical Systems has gained 65.3% since the start of the year compared to the -4.9% move for the Zacks Medical sector and the 5.5% return for the Zacks Medical - Dental Supplies industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 28, 2020, Merit Medical reported EPS of $0.42 versus consensus estimate of $0.19.
For the current fiscal year, Merit Medical is expected to post earnings of $1.28 per share on $937.95 million in revenues. This represents a -12.33% change in EPS on a -5.72% change in revenues. For the next fiscal year, the company is expected to earn $1.77 per share on $1.05 billion in revenues. This represents a year-over-year change of 38.28% and 11.6%, respectively.
Valuation Metrics
Merit Medical may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Merit Medical has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 40.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.2X versus its peer group's average of 14.9X. Additionally, the stock has a PEG ratio of 3.36. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Merit Medical currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Merit Medical meets the list of requirements. Thus, it seems as though Merit Medical shares could have a bit more room to run in the near term.
How Does Merit Medical Stack Up to the Competition?
Shares of Merit Medical have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including AmerisourceBergen , Laboratory Corporation of America Holdings (LH - Free Report) , and Thermo Fisher Scientific (TMO - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 40% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Merit Medical, even beyond its own solid fundamental situation.