Back to top

Image: Bigstock

NuVasive: Strong Q2 Results, Overseas Holds Solid Prospect

Read MoreHide Full Article

On Aug 29, 2016, we issued an updated research report on NuVasive, Inc. , a global medical device company with focus on developing minimally disruptive surgical products and procedurally integrated solutions for the spine. The stock currently sports a Zacks Rank #1 (Strong Buy).

NuVasive posted strong results in the second quarter of 2016, with both earnings and revenues squarely beating the Zacks Consensus Estimate.

In a bid to bolster its global footprint in the spine market, NuVasive has been engaged in rapid innovation of technologies and services that would take spine surgery to the next level. Apart from introducing novel products of its own, acquisition has also been a strategy adopted by the company for market expansion.

To this end, NuVasive recently acquired Ellipse Technologies, which will allow the former full authority over Ellipse’s procedural solutions for complex skeletal deformity. Management expects this deal to drive the company’s revenue growth at multiples to market growth, targeting an approximate 14% improvement over 2015.

Additionally, the overseas market offers tremendous growth potential for NuVasive, given that the company currently holds a meagre 4% of the total market share in the space. The company currently expects its International business to grow 38% in 2016 at constant exchange rates.

On the flip side, persistent margin decline continued to be a crucial issue as far as NuVasive’s operating performance is concerned. During the second quarter of 2016, NuVasive’s gross margin suffered a contraction of 143 basis points on a 23.4% increase in cost of goods sold.

Moreover, worldwide macroeconomic headwinds, fierce competition and pricing pressure remain causes of concern.

Stocks to Consider

Other top-ranked medical stocks are Lantheus Holdings, Inc. (LNTH - Free Report) , GW Pharmaceuticals plc and Quidel Corp. (QDEL - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). 

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


QuidelOrtho Corporation (QDEL) - free report >>

Lantheus Holdings, Inc. (LNTH) - free report >>

Published in