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Merit Medical Gains 26.4% Year to Date: What's Driving the Stock?
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Merit Medical Systems (MMSI - Free Report) witnessed strong momentum in the year-to-date period. Shares of the company have rallied 26.4% against the industry’s decline of 1%. The S&P 500 Composite has risen 16.3% in the same period.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.
South Jordan, UT-headquartered Merit Medical provides various peripheral and cardiac intervention products to cure cardiac conditions specific to interventional cardiology and electrophysiology. The company conducts its business via two operating segments — Cardiovascular (which includes Peripheral Intervention or PI, Cardiac Intervention or CI Custom Procedural Solutions or CPS and Original Equipment Manufacturer or OEM) and Endoscopy.
The Cardiovascular segment offers a broad line of medical devices used to gain and maintain vascular access. These products include Merit Medical’s micropuncture kits, angiographic needles, its family of Prelude Introducer Sheaths and a wide range of guide wires and safety products. The Endoscopy segment’s products, Merit Medical Endotek, are organized into two product portfolios — gastroenterology and pulmonary.
Image Source: Zacks Investment Research
Catalysts Driving MMSI’s Growth
Investors are upbeat about Merit Medical’s strong product portfolio and strength in its Cardiovascular business segment. In July, Merit Medical executed an asset purchase agreement with EndoGastric Solutions, Inc. The asset acquisition expands the company’s endoscopy portfolio with a minimally-invasive solution — EndoGastric Solutions’ EsophyX Z+ device — for patients suffering from chronic gastroesophageal reflux disease.
In May, Merit Medical announced the U.S. commercial release of the basixSKY Inflation Device. The device is available as a standalone solution and in kits with Merit Medical’s Angioplasty Packs, configured to offer complementing AccessPLUS, Honor, and PhD hemostasis valves.
Also, in May, Merit Medical received the FDA’s 510(k) clearance for its Siege Vascular Plug. The company also announced the launch of its Bearing nsPVA Express Prefilled Syringe in the United States and Australia.
Merit Medical’s cardiovascular sales for the three months ended June 30, 2024, were 96.9% of total sales and up 5.3% from the corresponding period of 2023. On the second quarter of 2024 earnings call in August, Merit Medical’s management confirmed that the total revenue growth of 5.6% on a reported basis and 6.6% at CER was partly driven by growth in its Cardiovascular segment. Management also stated that the Cardiovascular segment was the primary driver of the better-than-expected total revenue results versus the high end of constant currency growth expectations in the quarter.
MMSI ended the second quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. The year-over-year uptick in the top line and bottom line was impressive. The company saw revenue growth in both its segments and across the majority of the product categories within its Cardiovascular unit.
Robust performances in the United States and outside were impressive. The expansion in operating margin bodes well for the stock. These tailwinds are likely to help in improving the stock’s price.
Factor That May Offset Gains for MMSI
Merit Medical competes strongly in the markets where it operates. The company is a global competitor in multiple markets, such as interventional cardiology, diagnostics, and radiology.
Many reputable companies have more financial, technological, and other resources and are more widely available in the market than Merit Medical. With these resources and market presence, competitors may be able to win market share by marketing their products more effectively or at lower costs.
Key Picks
Some better-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) , Quest Diagnostics (DGX - Free Report) and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%. Universal Health Service has gained 56.1% so far this year compared with the industry's 48.1% growth.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%. Quest Diagnostics shares have gained 13.9% so far this year compared with the industry’s 17.9% growth.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%. ABM's shares have risen 27.4% so far this year compared with the industry’s 17% growth.
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Merit Medical Gains 26.4% Year to Date: What's Driving the Stock?
Merit Medical Systems (MMSI - Free Report) witnessed strong momentum in the year-to-date period. Shares of the company have rallied 26.4% against the industry’s decline of 1%. The S&P 500 Composite has risen 16.3% in the same period.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.
South Jordan, UT-headquartered Merit Medical provides various peripheral and cardiac intervention products to cure cardiac conditions specific to interventional cardiology and electrophysiology. The company conducts its business via two operating segments — Cardiovascular (which includes Peripheral Intervention or PI, Cardiac Intervention or CI Custom Procedural Solutions or CPS and Original Equipment Manufacturer or OEM) and Endoscopy.
The Cardiovascular segment offers a broad line of medical devices used to gain and maintain vascular access. These products include Merit Medical’s micropuncture kits, angiographic needles, its family of Prelude Introducer Sheaths and a wide range of guide wires and safety products. The Endoscopy segment’s products, Merit Medical Endotek, are organized into two product portfolios — gastroenterology and pulmonary.
Image Source: Zacks Investment Research
Catalysts Driving MMSI’s Growth
Investors are upbeat about Merit Medical’s strong product portfolio and strength in its Cardiovascular business segment. In July, Merit Medical executed an asset purchase agreement with EndoGastric Solutions, Inc. The asset acquisition expands the company’s endoscopy portfolio with a minimally-invasive solution — EndoGastric Solutions’ EsophyX Z+ device — for patients suffering from chronic gastroesophageal reflux disease.
In May, Merit Medical announced the U.S. commercial release of the basixSKY Inflation Device. The device is available as a standalone solution and in kits with Merit Medical’s Angioplasty Packs, configured to offer complementing AccessPLUS, Honor, and PhD hemostasis valves.
Also, in May, Merit Medical received the FDA’s 510(k) clearance for its Siege Vascular Plug. The company also announced the launch of its Bearing nsPVA Express Prefilled Syringe in the United States and Australia.
Merit Medical’s cardiovascular sales for the three months ended June 30, 2024, were 96.9% of total sales and up 5.3% from the corresponding period of 2023. On the second quarter of 2024 earnings call in August, Merit Medical’s management confirmed that the total revenue growth of 5.6% on a reported basis and 6.6% at CER was partly driven by growth in its Cardiovascular segment. Management also stated that the Cardiovascular segment was the primary driver of the better-than-expected total revenue results versus the high end of constant currency growth expectations in the quarter.
MMSI ended the second quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. The year-over-year uptick in the top line and bottom line was impressive. The company saw revenue growth in both its segments and across the majority of the product categories within its Cardiovascular unit.
Robust performances in the United States and outside were impressive. The expansion in operating margin bodes well for the stock. These tailwinds are likely to help in improving the stock’s price.
Factor That May Offset Gains for MMSI
Merit Medical competes strongly in the markets where it operates. The company is a global competitor in multiple markets, such as interventional cardiology, diagnostics, and radiology.
Many reputable companies have more financial, technological, and other resources and are more widely available in the market than Merit Medical. With these resources and market presence, competitors may be able to win market share by marketing their products more effectively or at lower costs.
Key Picks
Some better-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) , Quest Diagnostics (DGX - Free Report) and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%. Universal Health Service has gained 56.1% so far this year compared with the industry's 48.1% growth.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%. Quest Diagnostics shares have gained 13.9% so far this year compared with the industry’s 17.9% growth.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%. ABM's shares have risen 27.4% so far this year compared with the industry’s 17% growth.