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STERIS Continues to Trade Below Industry on Dull Outlook
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On Mar 16, we issued an updated research report on Ohio-based STERIS plc (STE - Free Report) - a manufacturer and marketer of infection prevention, decontamination, microbial reduction, along with surgical, and gastrointestinal support products and services. The company currently carries a Zacks Rank #4 (Sell).
Since STERIS released its dismal third-quarter fiscal 2017 results last month, the company’s share price has consistently remained below the Zacks Categorized Medical-Instruments Industry. The company’s lowered revenue and earnings guidance for fiscal 2017 hints a gloomy operating scenario in the days ahead. Over the last three months, the stock has gained 0.7% which is much below the 7.29% gain of the broader industry.
We note that the government’s and insurance companies’ consistent efforts to curb the rising healthcare costs have been putting pressure on the stock for quite some time. We are also concerned about the current customer consolidation scenario which will continue to adversely impact the company, unless checked immediately. The competitive landscape and weak cost reduction initiatives also remain an overhang.
On a positive note, organic growth performance was strong across most of the segments. Further, growth in free cash flow reserve is indicative of the strong cash balance reserve the company currently holds.
We note that Synergy Health—the company STERIS acquired last year—was one of the primary contributors to the strong double-digit revenue growth observed by the combined company. Management expects Synergy to contribute between $640–$650 million or a low-single-digit growth in fiscal 2017.
Key Picks
Better-ranked stocks in the medical product sector are Inogen, Inc. (INGN - Free Report) , Bovie Medical Corporation and Cardiovascular Systems, Inc. . Inogen sports a Zacks Rank #1 (Strong Buy) while the other two companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained 77.3% in the last one year in comparison to the S&P 500’s gain of 16.7%. The company has a stellar four-quarter average earnings surprise of over 49.08%.
Bovie Medical surged 49.4% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 28.7%.
Cardiovascular Systems gained over 100% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years, compared to the industry average of 15.2%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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STERIS Continues to Trade Below Industry on Dull Outlook
On Mar 16, we issued an updated research report on Ohio-based STERIS plc (STE - Free Report) - a manufacturer and marketer of infection prevention, decontamination, microbial reduction, along with surgical, and gastrointestinal support products and services. The company currently carries a Zacks Rank #4 (Sell).
Since STERIS released its dismal third-quarter fiscal 2017 results last month, the company’s share price has consistently remained below the Zacks Categorized Medical-Instruments Industry. The company’s lowered revenue and earnings guidance for fiscal 2017 hints a gloomy operating scenario in the days ahead. Over the last three months, the stock has gained 0.7% which is much below the 7.29% gain of the broader industry.
We note that the government’s and insurance companies’ consistent efforts to curb the rising healthcare costs have been putting pressure on the stock for quite some time. We are also concerned about the current customer consolidation scenario which will continue to adversely impact the company, unless checked immediately. The competitive landscape and weak cost reduction initiatives also remain an overhang.
On a positive note, organic growth performance was strong across most of the segments. Further, growth in free cash flow reserve is indicative of the strong cash balance reserve the company currently holds.
We note that Synergy Health—the company STERIS acquired last year—was one of the primary contributors to the strong double-digit revenue growth observed by the combined company. Management expects Synergy to contribute between $640–$650 million or a low-single-digit growth in fiscal 2017.
Key Picks
Better-ranked stocks in the medical product sector are Inogen, Inc. (INGN - Free Report) , Bovie Medical Corporation and Cardiovascular Systems, Inc. . Inogen sports a Zacks Rank #1 (Strong Buy) while the other two companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained 77.3% in the last one year in comparison to the S&P 500’s gain of 16.7%. The company has a stellar four-quarter average earnings surprise of over 49.08%.
Bovie Medical surged 49.4% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 28.7%.
Cardiovascular Systems gained over 100% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years, compared to the industry average of 15.2%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>