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Natus Medical Closes GN Otometrics Business Acquisition
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Pleasanton, CA-based Natus Medical Incorporated , a worldwide designer and manufacturer of newborn healthcare products, announced the purchase of GN Otometrics from Denmark-based GN Store Nord. The deal, announced in 2016, is worth $145 million.
Since the announcement of the deal on Sep 26, 2016, shares of Natus Medical has lost 13.1% to close at $35.10 on Jan 3.
In fact, for the past one month, the company represents a negative return of almost 6.07%, comparing unfavorably with the Zacks classified Medical Instruments sub-industry’s gain of 1.7%. On the brighter side, Natus Medical has compelling fundamentals both in terms of revenues and adjusted earnings. Over the past four years, the company’s revenues have multiplied at a CAGR of 8.8%, whereas adjusted earnings have grown at a CAGR of 39.6%.
Getting back to the deal, management expects an initial operating profit margin 10% for Otometrics in 2017 and 20% in the following year. The company also forecasts Otometrics to grow organically by more than 5% in the coming years.
With annual revenues of approximately $110 million, Otometrics is a leading manufacturer of hearing, diagnostic and balance-assessment equipment. The company is known for its exclusive lightweight Madsen brand hearing screeners and Oracle product line.
Per management, the addition of Otometrics’ hearing screening line of offerings, network and customer base will fortify Natus Medical’s hold in the hearing space.
Our Take
Despite the sluggish market trends, long-term expected earnings growth of 18.5% makes the stock a compelling pick for investors.
Aditionally, Natus Medical crushed the Zacks Consensus Estimate for earnings in the past four trailing quarters, at an average of 10.22%. Furthermore, the global hearing aids market is forecasted to reach a worth of $8,373.9 million by 2020, multiplying at a CAGR of 6.3%.
Zacks Rank & Key Picks
Currently, Natus Medical has a Zacks Rank #3 (Hold).
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 53.1%.
Cogentix Medical has posted a positive earnings surprise of 100% in the last reported quarter. Additionally, the company posted a promising one-year return of almost 74.2%.
Penumbra has a long-term expected earnings growth rate of approximately 20%. Notably, the stock represents an impressive one-year return of 16.4%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Natus Medical Closes GN Otometrics Business Acquisition
Pleasanton, CA-based Natus Medical Incorporated , a worldwide designer and manufacturer of newborn healthcare products, announced the purchase of GN Otometrics from Denmark-based GN Store Nord. The deal, announced in 2016, is worth $145 million.
Since the announcement of the deal on Sep 26, 2016, shares of Natus Medical has lost 13.1% to close at $35.10 on Jan 3.
In fact, for the past one month, the company represents a negative return of almost 6.07%, comparing unfavorably with the Zacks classified Medical Instruments sub-industry’s gain of 1.7%. On the brighter side, Natus Medical has compelling fundamentals both in terms of revenues and adjusted earnings. Over the past four years, the company’s revenues have multiplied at a CAGR of 8.8%, whereas adjusted earnings have grown at a CAGR of 39.6%.
Getting back to the deal, management expects an initial operating profit margin 10% for Otometrics in 2017 and 20% in the following year. The company also forecasts Otometrics to grow organically by more than 5% in the coming years.
With annual revenues of approximately $110 million, Otometrics is a leading manufacturer of hearing, diagnostic and balance-assessment equipment. The company is known for its exclusive lightweight Madsen brand hearing screeners and Oracle product line.
Per management, the addition of Otometrics’ hearing screening line of offerings, network and customer base will fortify Natus Medical’s hold in the hearing space.
Our Take
Despite the sluggish market trends, long-term expected earnings growth of 18.5% makes the stock a compelling pick for investors.
NATUS MEDICAL Price
NATUS MEDICAL Price | NATUS MEDICAL Quote
Aditionally, Natus Medical crushed the Zacks Consensus Estimate for earnings in the past four trailing quarters, at an average of 10.22%. Furthermore, the global hearing aids market is forecasted to reach a worth of $8,373.9 million by 2020, multiplying at a CAGR of 6.3%.
Zacks Rank & Key Picks
Currently, Natus Medical has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector include Addus HomeCare Corporation (ADUS - Free Report) , Cogentix Medical, Inc. (CGNT - Free Report) and Penumbra Inc. (PEN - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 53.1%.
Cogentix Medical has posted a positive earnings surprise of 100% in the last reported quarter. Additionally, the company posted a promising one-year return of almost 74.2%.
Penumbra has a long-term expected earnings growth rate of approximately 20%. Notably, the stock represents an impressive one-year return of 16.4%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>