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Integer Holdings Gains 40.8% YTD: What's Driving the Stock?
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Integer Holdings (ITGR - Free Report) witnessed strong momentum year to date. Shares of the company have gained 40.8% compared with the 6.7% rise of the industry in the same time frame. The S&P 500 Composite has risen 26.1% during 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.
Plano, TX-based Integer Holdings manufactures and develops medical devices and components primarily for original equipment manufacturers.
In November, ITGR announced the completion of the previously announced sale of its Electrochem business to Ultralife Corporation for $50 million in cash. Following the divestiture transaction, Integer Holdings is now completely a medical technology company with additional cash to pay down debt and execute its inorganic growth strategy.
Image Source: Zacks Investment Research
Factors Favoring ITGR’s Growth
Integer Holdings is witnessing an upward trend in its stock price, prompted by its execution of manufacturing excellence initiatives, an improved supply chain, and a complete focus on the medical segment following the divestiture. The optimism led by a solid third-quarter 2024 performance and its strength in Medical sales are expected to contribute further.
Investors seemed optimistic about Integer Holdings’ recent facility expansions. In September, ITGR announced the completion of its facility expansions in Ireland. This announcement followed the official opening of an 80,000 sq. ft. expansion of Integer Holdings guidewire manufacturing facility in New Ross, County Wexford, Ireland, earlier in September. This expansion in Ireland provides ITGR with the capacity and differentiated capabilities to amplify its customers’ innovation and help the company bring products to market faster. Accordingly, investors seemed to be optimistic following this news.
Integer Holdings exited the third quarter of 2024 with impressive results. The strong year-over-year top-line and bottom-line performances were impressive. Robust performances by the Medical segment and strength in all the product lines of the Medical segment were encouraging. These factors must have aided in surging the stock’s price.
Integer Holdings generated a gross profit of $116.6 million in the third quarter, up 11% year over year. The gross margin in the third quarter expanded 56 basis points (bps) to 27%. Adjusted operating profit totaled $75.6 million in the third quarter, reflecting a 17.1% uptick from the prior-year quarter. Adjusted operating margin in the third quarter expanded 125 bps to 17.5%. The expansion of both margins bodes well for the stock and has contributed to raising the price of the stock.
Factors That May Offset the Gains for ITGR
Sales of Integer Holdings’ products into the energy market depend upon the condition of the oil and gas industry. Currently, oil and natural gas prices have been subject to significant fluctuation. As a result, the oil and gas exploration and production business is affected by various political and economic factors. Per management, a change in the oil and gas exploration and production industry or a reduction in the exploration and production expenditures of oil and gas companies could cause the company’s energy market revenues to decline.
A Look at Estimates
Integer Holdings’earnings per share (EPS) in 2024 and 2025 are expected to grow 14.1% and 13.3% to $5.33 and $6.04 on a year-over-year basis, respectively. The Zacks Consensus Estimate for EPS has increased 3 cents for 2024 and decreased 2 cents for 2025 in the past 30 days.
Revenues for 2024 and 2025 are anticipated to rise 8.3% and 6.9% to $1.73 billion and $1.85 billion, respectively, on a year-over-year basis.
ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 19.2% year to date against the industry’s6.1% growth.
Quest Diagnostics has an estimated long-term growth rate of 6.8%. DGX's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Quest Diagnostics’ shares have risen 42% year to date compared with the industry's 14.9% growth.
RadNet’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 98.2%.
RDNT’s shares have soared 93.7% year to date compared with the industry’s 14.8% growth.
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Integer Holdings Gains 40.8% YTD: What's Driving the Stock?
Integer Holdings (ITGR - Free Report) witnessed strong momentum year to date. Shares of the company have gained 40.8% compared with the 6.7% rise of the industry in the same time frame. The S&P 500 Composite has risen 26.1% during 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.
Plano, TX-based Integer Holdings manufactures and develops medical devices and components primarily for original equipment manufacturers.
In November, ITGR announced the completion of the previously announced sale of its Electrochem business to Ultralife Corporation for $50 million in cash. Following the divestiture transaction, Integer Holdings is now completely a medical technology company with additional cash to pay down debt and execute its inorganic growth strategy.
Image Source: Zacks Investment Research
Factors Favoring ITGR’s Growth
Integer Holdings is witnessing an upward trend in its stock price, prompted by its execution of manufacturing excellence initiatives, an improved supply chain, and a complete focus on the medical segment following the divestiture. The optimism led by a solid third-quarter 2024 performance and its strength in Medical sales are expected to contribute further.
Investors seemed optimistic about Integer Holdings’ recent facility expansions. In September, ITGR announced the completion of its facility expansions in Ireland. This announcement followed the official opening of an 80,000 sq. ft. expansion of Integer Holdings guidewire manufacturing facility in New Ross, County Wexford, Ireland, earlier in September. This expansion in Ireland provides ITGR with the capacity and differentiated capabilities to amplify its customers’ innovation and help the company bring products to market faster. Accordingly, investors seemed to be optimistic following this news.
Integer Holdings exited the third quarter of 2024 with impressive results. The strong year-over-year top-line and bottom-line performances were impressive. Robust performances by the Medical segment and strength in all the product lines of the Medical segment were encouraging. These factors must have aided in surging the stock’s price.
Integer Holdings generated a gross profit of $116.6 million in the third quarter, up 11% year over year. The gross margin in the third quarter expanded 56 basis points (bps) to 27%. Adjusted operating profit totaled $75.6 million in the third quarter, reflecting a 17.1% uptick from the prior-year quarter. Adjusted operating margin in the third quarter expanded 125 bps to 17.5%. The expansion of both margins bodes well for the stock and has contributed to raising the price of the stock.
Factors That May Offset the Gains for ITGR
Sales of Integer Holdings’ products into the energy market depend upon the condition of the oil and gas industry. Currently, oil and natural gas prices have been subject to significant fluctuation. As a result, the oil and gas exploration and production business is affected by various political and economic factors. Per management, a change in the oil and gas exploration and production industry or a reduction in the exploration and production expenditures of oil and gas companies could cause the company’s energy market revenues to decline.
A Look at Estimates
Integer Holdings’earnings per share (EPS) in 2024 and 2025 are expected to grow 14.1% and 13.3% to $5.33 and $6.04 on a year-over-year basis, respectively. The Zacks Consensus Estimate for EPS has increased 3 cents for 2024 and decreased 2 cents for 2025 in the past 30 days.
Revenues for 2024 and 2025 are anticipated to rise 8.3% and 6.9% to $1.73 billion and $1.85 billion, respectively, on a year-over-year basis.
Stocks to Consider
Some better-ranked stocks in the broader medical space are AngioDynamics (ANGO - Free Report) , Quest Diagnostics (DGX - Free Report) and RadNet (RDNT - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 19.2% year to date against the industry’s6.1% growth.
Quest Diagnostics has an estimated long-term growth rate of 6.8%. DGX's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Quest Diagnostics’ shares have risen 42% year to date compared with the industry's 14.9% growth.
RadNet’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 98.2%.
RDNT’s shares have soared 93.7% year to date compared with the industry’s 14.8% growth.