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Integra LifeSciences Holdings Corporation (IART - Free Report) has been witnessing certain major developments overseas. However, a tough competitive landscape is a concern. Integra carries a Zacks Rank #3 (Hold).
Integra has outperformed its industry in the past year. The stock has gained 5.3% against the sector’s 12.2% fall.
Integra exited the third quarter of 2021 on a bullish note with better-than-expected earnings and revenues. The year-over-year growth in the Codman Specialty Surgical (CSS) segment buoys optimism. Sales from CereLink ICP Monitor System and SurgiMend raise confidence. Ongoing sales recovery across geographies and product lineslooks encouraging.
Strong organic growth in neurosurgery, instruments, wound reconstruction and private label businesses in the reported quarter compared with 2020 and 2019 is an added advantage. The robust uptake of the company’s products is a positive. An improvement in the short-term cash level also appears promising. Further, the company raised its EPS guidance for 2021.
Instruments sales benefited from a robust recovery in order demand in the reported quarter. Meanwhile, strength in Neurosurgery was broad-based, including sales of the newly-launched CereLink ICP Monitor System, which resulted in a $5-million benefit from early adopters. Integra expects a more modest benefit from CereLink in the fourth quarter, with the order backlog fully met, and is optimistic about the multi-year growth trajectory.
Geographically, sales in the CSS segment climbed about 8%, both in and outside the United States, compared with the previous year. The segment saw year-over-year growth in international sales across all major regions. Compared with the pre-pandemic level in 2019, international sales increased low double digits in Japan and China.
On the flip side, a year-over-year decline in Integra’s Tissue Technologies arm in the third quarter raises concern. During the reported quarter, the company’s selling, general and administrative (SG&A) expenses increased 3.9%, while research and development expenses rose 32.7%. These mounting operating expenses are building significant pressure on the company’s bottom line, leading to a contraction in both margins.
The company’s business was impacted by increased freight and packaging costs and some supply-chain disruptions in the third quarter. Stiff competition and foreign exchange woes persist.
Although Integra’s performance in the first half of 2021 reflected a strong recovery from COVID-related impact, the emerging new and more contagious strain of the virus might again disrupt business down the line. During its earnings call for third-quarter 2021, the company noted that the impact of the lethal Delta variant of COVID-19 and hospital staffing shortages resulted in procedural deferrals in parts of the United States, Europe and Australia during the reported quarter.
Key Picks
A few better-ranked stocks from the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , Laboratory Corporation of America Holdings (LH - Free Report) , or LabCorp and Medpace Holdings, Inc. (MEDP - Free Report) .
Thermo Fisher, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
LabCorp, carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2021 adjusted EPS of $6.82, which surpassed the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the Zacks Consensus Estimate by 13.4%.
LabCorp has an estimated long-term growth rate of 10.6%. LH surpassed estimates in the trailing four quarters, the average surprise being 25.7%.
Medpace reported third-quarter 2021 adjusted EPS of $1.29, surpassing the Zacks Consensus Estimate by 20.6%. Revenues of $295.57 million beat the Zacks Consensus Estimate by 1.2%.
Medpace has an estimated long-term growth rate of 16.4%. MEDP surpassed estimates in the trailing four quarters, the average surprise being 11.9%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Integra (IART) Businesses Rebound Despite Supply Issues
Integra LifeSciences Holdings Corporation (IART - Free Report) has been witnessing certain major developments overseas. However, a tough competitive landscape is a concern. Integra carries a Zacks Rank #3 (Hold).
Integra has outperformed its industry in the past year. The stock has gained 5.3% against the sector’s 12.2% fall.
Integra exited the third quarter of 2021 on a bullish note with better-than-expected earnings and revenues. The year-over-year growth in the Codman Specialty Surgical (CSS) segment buoys optimism. Sales from CereLink ICP Monitor System and SurgiMend raise confidence. Ongoing sales recovery across geographies and product lineslooks encouraging.
Strong organic growth in neurosurgery, instruments, wound reconstruction and private label businesses in the reported quarter compared with 2020 and 2019 is an added advantage. The robust uptake of the company’s products is a positive. An improvement in the short-term cash level also appears promising. Further, the company raised its EPS guidance for 2021.
Integra LifeSciences Holdings Corporation Price
Integra LifeSciences Holdings Corporation price | Integra LifeSciences Holdings Corporation Quote
Instruments sales benefited from a robust recovery in order demand in the reported quarter. Meanwhile, strength in Neurosurgery was broad-based, including sales of the newly-launched CereLink ICP Monitor System, which resulted in a $5-million benefit from early adopters. Integra expects a more modest benefit from CereLink in the fourth quarter, with the order backlog fully met, and is optimistic about the multi-year growth trajectory.
Integra LifeSciences Holdings Corporation Price
Integra LifeSciences Holdings Corporation price | Integra LifeSciences Holdings Corporation Quote
Geographically, sales in the CSS segment climbed about 8%, both in and outside the United States, compared with the previous year. The segment saw year-over-year growth in international sales across all major regions. Compared with the pre-pandemic level in 2019, international sales increased low double digits in Japan and China.
On the flip side, a year-over-year decline in Integra’s Tissue Technologies arm in the third quarter raises concern. During the reported quarter, the company’s selling, general and administrative (SG&A) expenses increased 3.9%, while research and development expenses rose 32.7%. These mounting operating expenses are building significant pressure on the company’s bottom line, leading to a contraction in both margins.
The company’s business was impacted by increased freight and packaging costs and some supply-chain disruptions in the third quarter. Stiff competition and foreign exchange woes persist.
Although Integra’s performance in the first half of 2021 reflected a strong recovery from COVID-related impact, the emerging new and more contagious strain of the virus might again disrupt business down the line. During its earnings call for third-quarter 2021, the company noted that the impact of the lethal Delta variant of COVID-19 and hospital staffing shortages resulted in procedural deferrals in parts of the United States, Europe and Australia during the reported quarter.
Key Picks
A few better-ranked stocks from the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , Laboratory Corporation of America Holdings (LH - Free Report) , or LabCorp and Medpace Holdings, Inc. (MEDP - Free Report) .
Thermo Fisher, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
LabCorp, carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2021 adjusted EPS of $6.82, which surpassed the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the Zacks Consensus Estimate by 13.4%.
LabCorp has an estimated long-term growth rate of 10.6%. LH surpassed estimates in the trailing four quarters, the average surprise being 25.7%.
Medpace reported third-quarter 2021 adjusted EPS of $1.29, surpassing the Zacks Consensus Estimate by 20.6%. Revenues of $295.57 million beat the Zacks Consensus Estimate by 1.2%.
Medpace has an estimated long-term growth rate of 16.4%. MEDP surpassed estimates in the trailing four quarters, the average surprise being 11.9%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.