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Why You Should Add Haemonetics (HAE) to Your Portfolio Now
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Haemonetics (HAE - Free Report) is likely to grow in the coming quarters due to its evolving Hospital portfolio, which is creating new opportunities for growth and diversification. The favorable prospects within the Plasma franchise also buoy optimism. The robust utilization of TEG disposables in the United States and China is driving revenues in Hemostasis Management, which is highly encouraging.
Meanwhile, the impacts of economic uncertainties and foreign exchange remain concerns for the company’s operations.
In the past year, this Zacks Rank #2 (Buy) stock has rallied 1.2% compared with the 1.7% rise of the industry and a 25.1% increase of the S&P 500 composite.
The global provider of blood and plasma supplies and services has a market capitalization of $4.38 billion. HAE surpassed estimates in each of the trailing four quarters, delivering an average earnings surprise of 15.99%.
Let’s delve deeper.
Tailwinds
Hospital Business Recovery Continues: Each of the four market-leading product lines within Haemonetics’ hospital portfolio focuses on helping hospitals and clinicians provide the highest standard of patient care while simultaneously reducing operating and procedural costs. Moreover, the OpSens acquisition in December 2023 has expanded the business with procedure-enabling technologies in high-growth areas.
Image Source: Zacks Investment Research
Hospital revenues increased 22% In the fiscal third quarter, driven by the continued success of Vascular Closure and hemostasis management. Vascular Closure grew 28%, driven by new account openings in electrophysiology and interventional cardiology. Haemonetics is progressing well to be in the 80% of the target top 600 U.S. hospital accounts by the end of this fiscal year, providing access to the vast majority of addressable procedures in this market. Internationally, the products are gaining traction, contributing nearly 200 basis points of growth in the fiscal third quarter.
Potential Upsides of Plasma Franchise: Within the business unit, the demand for source plasma has continued to grow due to an expanding end-user market for plasma-derived biopharmaceuticals. Plasma revenues grew 8% in the third quarter of fiscal 2024, driven primarily by volumes.
The collections environment in the United States continued to be favorable, with disposables growing 7% in the quarter and 17% year to date as of the last earnings call. The rollout of the proprietary technology, Persona, is gaining momentum, with more than 25 million collections.
Advancements in NexLynk DMS, its bidirectional connectivity software, are improving cycle times, reducing errors and allowing staff to focus on taking care of donors and reducing door-to-door time. The combination of Persona, Express Plus and NexLynk has set a new industry standard for center throughput, cost per liter and donor satisfaction.
Huge Potential of Hemostasis Management Franchise: Haemonetics’ portfolio of hemostasis diagnostic systems enables clinicians to holistically assess a patient's coagulation status at the point-of-care or laboratory setting. The company markets four viscoelastic testing systems to hospitals and laboratories as an alternative to routine blood tests.
In the fiscal third quarter of 2024, Hemostasis business revenues rose 18%, driven by the strong utilization of TEG disposables in the United States and China. The growth momentum is likely to be sustained as it capitalizes on its significantly expanded R&D and clinical capabilities to develop new and existing products and commercial infrastructure to cover the majority of its strategic accounts in the $700 million underpenetrated total addressable market.
Downsides
Economic Uncertainty, a Concern: Continued uncertainty around inflationary pressures, rising interest rates and macroeconomic conditions have increased the risk of creating new or exacerbating existing economic challenges Haemoentics face. The company has implemented cost containment measures and selective price increases to offset inflationary pressure on its global supply chain but may not fully offset all operational cost increases. In the fiscal third quarter, HAE registered an increase of 8% in the cost of goods sold.
Foreign Exchange Translation Impacts Sales: Haemonetics derived nearly 25.4% of the fiscal third-quarter total sales outside the United States. Fluctuations in foreign exchange rates, particularly in the value of the Yen and Euro relative to the U.S. dollar, impacted the company's operational results.
Moreover, a stronger dollar, causing significant currency fluctuations, has been affecting the company’s outcome over the past few quarters, and no respite is expected in the near term. In the fiscal third quarter, Haemonetics’ revenues were negatively impacted by 0.2% due to foreign exchange translation.
Estimate Trend
The Zacks Consensus Estimate for Haemonetics’ fiscal 2024 earnings has remained constant at $3.95 in the past 30 days.
The Zacks Consensus Estimate for the company’s fiscal 2024 revenues is pegged at $1.29 billion, which suggests a 10.5% increase from the year-ago reported number.
DaVita has a long-term estimated earnings growth rate of 12.1% compared with the industry’s 11.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 35.6%. Its shares have rallied 55.7% compared with the industry’s 14.3% rise in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 14.2% compared with the industry’s 11.6%. Shares of the company have increased 31.8% compared with the industry’s 7.1% rise over the past year.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%. In the last reported quarter, it delivered an average earnings surprise of 16.7%.
Stryker, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 11.7% for the next year compared with the S&P 500’s 8%. Shares of SYK have increased 18.8% compared with the industry’s 1.7% rise over the past year.
SYK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.1%. In the last reported quarter, it delivered an average earnings surprise of 5.8%.
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Why You Should Add Haemonetics (HAE) to Your Portfolio Now
Haemonetics (HAE - Free Report) is likely to grow in the coming quarters due to its evolving Hospital portfolio, which is creating new opportunities for growth and diversification. The favorable prospects within the Plasma franchise also buoy optimism. The robust utilization of TEG disposables in the United States and China is driving revenues in Hemostasis Management, which is highly encouraging.
Meanwhile, the impacts of economic uncertainties and foreign exchange remain concerns for the company’s operations.
In the past year, this Zacks Rank #2 (Buy) stock has rallied 1.2% compared with the 1.7% rise of the industry and a 25.1% increase of the S&P 500 composite.
The global provider of blood and plasma supplies and services has a market capitalization of $4.38 billion. HAE surpassed estimates in each of the trailing four quarters, delivering an average earnings surprise of 15.99%.
Let’s delve deeper.
Tailwinds
Hospital Business Recovery Continues: Each of the four market-leading product lines within Haemonetics’ hospital portfolio focuses on helping hospitals and clinicians provide the highest standard of patient care while simultaneously reducing operating and procedural costs. Moreover, the OpSens acquisition in December 2023 has expanded the business with procedure-enabling technologies in high-growth areas.
Image Source: Zacks Investment Research
Hospital revenues increased 22% In the fiscal third quarter, driven by the continued success of Vascular Closure and hemostasis management. Vascular Closure grew 28%, driven by new account openings in electrophysiology and interventional cardiology. Haemonetics is progressing well to be in the 80% of the target top 600 U.S. hospital accounts by the end of this fiscal year, providing access to the vast majority of addressable procedures in this market. Internationally, the products are gaining traction, contributing nearly 200 basis points of growth in the fiscal third quarter.
Potential Upsides of Plasma Franchise: Within the business unit, the demand for source plasma has continued to grow due to an expanding end-user market for plasma-derived biopharmaceuticals. Plasma revenues grew 8% in the third quarter of fiscal 2024, driven primarily by volumes.
The collections environment in the United States continued to be favorable, with disposables growing 7% in the quarter and 17% year to date as of the last earnings call. The rollout of the proprietary technology, Persona, is gaining momentum, with more than 25 million collections.
Advancements in NexLynk DMS, its bidirectional connectivity software, are improving cycle times, reducing errors and allowing staff to focus on taking care of donors and reducing door-to-door time. The combination of Persona, Express Plus and NexLynk has set a new industry standard for center throughput, cost per liter and donor satisfaction.
Huge Potential of Hemostasis Management Franchise: Haemonetics’ portfolio of hemostasis diagnostic systems enables clinicians to holistically assess a patient's coagulation status at the point-of-care or laboratory setting. The company markets four viscoelastic testing systems to hospitals and laboratories as an alternative to routine blood tests.
In the fiscal third quarter of 2024, Hemostasis business revenues rose 18%, driven by the strong utilization of TEG disposables in the United States and China. The growth momentum is likely to be sustained as it capitalizes on its significantly expanded R&D and clinical capabilities to develop new and existing products and commercial infrastructure to cover the majority of its strategic accounts in the $700 million underpenetrated total addressable market.
Downsides
Economic Uncertainty, a Concern: Continued uncertainty around inflationary pressures, rising interest rates and macroeconomic conditions have increased the risk of creating new or exacerbating existing economic challenges Haemoentics face. The company has implemented cost containment measures and selective price increases to offset inflationary pressure on its global supply chain but may not fully offset all operational cost increases. In the fiscal third quarter, HAE registered an increase of 8% in the cost of goods sold.
Foreign Exchange Translation Impacts Sales: Haemonetics derived nearly 25.4% of the fiscal third-quarter total sales outside the United States. Fluctuations in foreign exchange rates, particularly in the value of the Yen and Euro relative to the U.S. dollar, impacted the company's operational results.
Moreover, a stronger dollar, causing significant currency fluctuations, has been affecting the company’s outcome over the past few quarters, and no respite is expected in the near term. In the fiscal third quarter, Haemonetics’ revenues were negatively impacted by 0.2% due to foreign exchange translation.
Estimate Trend
The Zacks Consensus Estimate for Haemonetics’ fiscal 2024 earnings has remained constant at $3.95 in the past 30 days.
The Zacks Consensus Estimate for the company’s fiscal 2024 revenues is pegged at $1.29 billion, which suggests a 10.5% increase from the year-ago reported number.
Other Key Picks
Some better-ranked stocks from the broader medical space are DaVita (DVA - Free Report) , Cardinal Health (CAH - Free Report) and Stryker (SYK - Free Report) .
DaVita has a long-term estimated earnings growth rate of 12.1% compared with the industry’s 11.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 35.6%. Its shares have rallied 55.7% compared with the industry’s 14.3% rise in the past year.
DVA sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 14.2% compared with the industry’s 11.6%. Shares of the company have increased 31.8% compared with the industry’s 7.1% rise over the past year.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%. In the last reported quarter, it delivered an average earnings surprise of 16.7%.
Stryker, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 11.7% for the next year compared with the S&P 500’s 8%. Shares of SYK have increased 18.8% compared with the industry’s 1.7% rise over the past year.
SYK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.1%. In the last reported quarter, it delivered an average earnings surprise of 5.8%.