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Bull of the Day: BioTelemetry (BEAT)

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BioTelemetry (BEAT - Free Report) is a $2 billion maker of cardiac monitoring devices and services that just delivered an earnings report true to its name with a 65% positive surprise on the bottom line.
On October 30, BEAT reported third-quarter adjusted EPS of $0.53 vs. consensus estimates of $0.32 and sales of $100 million vs. the expectation of $98 million. 
The company also raised Q4 guidance and this inspired analysts to lift their estimates going forward, pushing BEAT shares into the top tier of the Zacks Rank. 
What Does BEAT Do?
BioTelemetry provides ambulatory outpatient management solutions for monitoring clinical information regarding an individual's health. It is focused on the diagnosis and monitoring of cardiac arrhythmias and other heart rhythm disorders using wireless and mobile technologies.
BEAT technology and systems, including mobile cardiac outpatient telemetry (MCOT), can give medical caregivers and patients remote information as well as historical data.
Estimates Jump for a Record Year
After BioTelemetry's Q3 report, investment bank analysts at Raymond James commented that "three straight quarters of accelerating organic revenue growth (+18% in 3Q) and 500bp of EBITDA margin expansion" made them "increasingly confident in management’s ability to execute."
Full-year 2018 revenue estimates have now climbed to $397 million, representing 38.4% growth. Next year's top line stands currently at $437 million, for 10% growth.
And on the profit line, 2018 EPS estimates were boosted 14% from $1.51 to $1.72, representing a 77% advance this year.
Next year's profit projections also rose to $1.72 which is flat year-over-year. But I suspect analysts are waiting until Q4 results before detailing their models.
A Picture Worth Thousands in Beats
To visualize the drivers of BEAT's share price doubling this year, you need look no further than the Zacks proprietary Price & Consensus chart, which plots annual earnings estimate revisions against the stock price...
You also see in the chart the quarterly earnings events. The bigger the green arrow, the bigger the EPS beat.
Will Apple Leave Medical to BEAT?
BEAT shares took off this year after inking a deal with Apple (AAPL - Free Report) to conduct a joint Heart Study. The new Apple Watch Series 4, which received FDA clearance as a Class II device, has the potential to expand the cardiac monitoring market.
So while Apple may not be interested in BEAT technology, the brand and research pedigree has clearly benefited BEAT growth and interest. 
But this also raises concerns that a move by Apple into BEAT's territory could be fatal if the giant iPhone maker is pursuing "medical grade" applications for the Watch or some other device.
Right now, it appears that Apple is not treading on BEAT's turf. And optimism remains among analysts that the services growth trajectory of the big fruit will only continue to benefit the addressable market for the little heart-watcher.
With average analyst price targets north of $70, I would be a buyer of BEAT and its low-30s P/E multiple any time it dips into the $50s.
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