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Reasons to Add Merit Medical (MMSI) Stock to Your Portfolio
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Merit Medical Systems, Inc. (MMSI - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2022 performance, along with its solid international exposure, is expected to contribute further. However, headwinds related to higher consolidation in the healthcare industry and lack of direct sales and marketing capabilities persist.
In the past year, this Zacks Rank #2 (Buy) stock has gained 25.6% against a 2.7% decline of the industry and a 13.2% decline of the S&P 500.
This renowned medical-devices provider has a market capitalization of $4 billion. The company is projected to record 11% growth over the next five years on the back of its continued strong segmental performance. It delivered an earnings surprise of 25.35% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about Merit Medical’s continued gains on the significant momentum of its new products. We are also optimistic about the company’s product pipeline, including radio and electrophysiology products. In November, the company launched two new devices — the basixALPHA Inflation Device and the PreludeSYNC EZ Radial Compression Device — for streamlining angioplasty procedures and optimizing hemostasis for radial artery procedures, respectively.
Last year, the company also announced the launch of the SCOUT Mini Reflector, which has been designed for use in soft tissues, such as breast and lymph nodes.
International Exposure: We are upbeat about Merit Medical’s current global operations, including its territories in Europe, Africa, Asia, Oceania, Central and South America, Mexico, Canada, and the Middle East. In the third quarter of 2022, Merit Medical confirmed that its international sales (42.7% of net sales) improved 6.1% from the corresponding period of 2021. This included increased sales of 5.7% in APAC operations, 17.4% in Rest of the World operations and 4.7% in EMEA operations.
Strong Q3 Results: Merit Medical’s robust third-quarter 2022 results buoy optimism. The company also saw solid segmental growth and growth across all product categories within its Cardiovascular unit. Solid product sales and robust performances in the United States and abroad were also witnessed. Strong execution and improving customer demand trends raised the overall top line. Expansion of the adjusted operating margin also bodes well.
Risk
Lack of Direct Sales and Marketing Capabilities: Merit Medical lacks direct sales and marketing capabilities in many countries. The company wholly depends on third-party distributors for the commercialization of products in countries like China, Japan, Russia and India. Per management, because of inefficiencies in the distributor base, Merit Medical often fails to successfully commercialize its products in these countries.
Merit Medical is witnessing a rising estimate trend for 2022 and 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved north from $2.47 to $2.57 for 2022 and from $2.78 to $2.82 for 2023.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $289.76 million, suggesting a 4.1% increase from the year-ago quarter’s reported number. The consensus estimate for earnings stands at 67 cents per share, indicating a decline of 5.6% year over year.
Other Key Picks
Some other stocks to consider from the same industry are Laboratory Corp. of America (LH - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and McKesson (MCK - Free Report) .
Laboratory Corp. of America, sporting a Zacks Rank #1 (Strong Buy) at present, has an earnings yield of 7% compared with the industry’s 4.3%. LH’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average beat being 6.06%.
Laboratory Corp. of America has lost 6.3% compared with the industry’s 2.7% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.7%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3.04%.
Cardinal Health has gained 46.8% against the industry’s 2.7% decline in the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average beat being 4.79%.
McKesson has gained 52.7% against the industry’s 2.7% decline in the past year.
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Reasons to Add Merit Medical (MMSI) Stock to Your Portfolio
Merit Medical Systems, Inc. (MMSI - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2022 performance, along with its solid international exposure, is expected to contribute further. However, headwinds related to higher consolidation in the healthcare industry and lack of direct sales and marketing capabilities persist.
In the past year, this Zacks Rank #2 (Buy) stock has gained 25.6% against a 2.7% decline of the industry and a 13.2% decline of the S&P 500.
This renowned medical-devices provider has a market capitalization of $4 billion. The company is projected to record 11% growth over the next five years on the back of its continued strong segmental performance. It delivered an earnings surprise of 25.35% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about Merit Medical’s continued gains on the significant momentum of its new products. We are also optimistic about the company’s product pipeline, including radio and electrophysiology products. In November, the company launched two new devices — the basixALPHA Inflation Device and the PreludeSYNC EZ Radial Compression Device — for streamlining angioplasty procedures and optimizing hemostasis for radial artery procedures, respectively.
Last year, the company also announced the launch of the SCOUT Mini Reflector, which has been designed for use in soft tissues, such as breast and lymph nodes.
International Exposure: We are upbeat about Merit Medical’s current global operations, including its territories in Europe, Africa, Asia, Oceania, Central and South America, Mexico, Canada, and the Middle East. In the third quarter of 2022, Merit Medical confirmed that its international sales (42.7% of net sales) improved 6.1% from the corresponding period of 2021. This included increased sales of 5.7% in APAC operations, 17.4% in Rest of the World operations and 4.7% in EMEA operations.
Strong Q3 Results: Merit Medical’s robust third-quarter 2022 results buoy optimism. The company also saw solid segmental growth and growth across all product categories within its Cardiovascular unit. Solid product sales and robust performances in the United States and abroad were also witnessed. Strong execution and improving customer demand trends raised the overall top line. Expansion of the adjusted operating margin also bodes well.
Risk
Lack of Direct Sales and Marketing Capabilities: Merit Medical lacks direct sales and marketing capabilities in many countries. The company wholly depends on third-party distributors for the commercialization of products in countries like China, Japan, Russia and India. Per management, because of inefficiencies in the distributor base, Merit Medical often fails to successfully commercialize its products in these countries.
Merit Medical Systems, Inc. Price
Merit Medical Systems, Inc. price | Merit Medical Systems, Inc. Quote
Estimate Trend
Merit Medical is witnessing a rising estimate trend for 2022 and 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved north from $2.47 to $2.57 for 2022 and from $2.78 to $2.82 for 2023.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $289.76 million, suggesting a 4.1% increase from the year-ago quarter’s reported number. The consensus estimate for earnings stands at 67 cents per share, indicating a decline of 5.6% year over year.
Other Key Picks
Some other stocks to consider from the same industry are Laboratory Corp. of America (LH - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and McKesson (MCK - Free Report) .
Laboratory Corp. of America, sporting a Zacks Rank #1 (Strong Buy) at present, has an earnings yield of 7% compared with the industry’s 4.3%. LH’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average beat being 6.06%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Laboratory Corp. of America has lost 6.3% compared with the industry’s 2.7% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.7%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3.04%.
Cardinal Health has gained 46.8% against the industry’s 2.7% decline in the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average beat being 4.79%.
McKesson has gained 52.7% against the industry’s 2.7% decline in the past year.