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Here's Why You Should Hold on to NuVasive (NUVA) Stock Now
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NuVasive, Inc. has been gaining on FDA clearances for its products as well as a slew of product launches. Its impressive second-quarter 2020 results buoy optimism as well. However, persistent pricing pressure and a tough competitive landscape are concerning.
Over the past year, the Zacks Rank #3 (Hold) stock has lost 11.3% versus the industry’s 8.1% growth and the S&P 500’s 19.4% rise.
The renowned surgical spine player has a market capitalization of $2.88 billion. The company projects 13.4% growth for the next five years and expects to maintain its strong performance. The company surpassed estimates in the trailing four quarters, the average surprise being 20.16%.
Let’s delve deeper.
Product Launches: We are upbeat about the slew of product launches by NuVasive. The company, in September, announced the limited availability of the latest Precice Plate for use in limb lengthening and reconstruction procedures from NuVasive Specialized Orthopedics. In July, the company launched its Time to Evolve campaign to help provide less-invasive surgical techniques. It also expanded its complex spine portfolio with the global commercial availability of Reline 3D (a posterior fixation system for patients suffering from pediatric spinal deformities) in June.
In May, the company announced the expansion of its Advanced Materials Science implant portfolio with the commercial launch of the Modulus XLIF Dual Sided Plate.
U.S. Surgical Support Prospects Solid: NuVasive’s buyout of Safe Passage in 2019 is encouraging for its Surgical Support business. Per management, the market is gradually experiencing greater adoption and rising demand for its offering of surgical alternatives with less tissue disruption. NuVasive continues to focus on unique spine offerings. Despite the pandemic-led business debacle, the company witnessed volume improvement throughout the second quarter. Additionally, NuVasive Clinical Services continued to drive business and operational efficiencies during this time.
Impressive Q2 Results: NuVasive’s narrower-than-expected loss per share in second-quarter 2020 buoys optimism. The company’s plans to maintain R&D investment instill investor confidence. The X360 system’s potential also buoys optimism. The FDA’s 510(k) clearances for Modulus ALIF and Cohere transforaminal lumbar interbody fusion (TLIF)-O look encouraging.
Downsides
Persistent Pricing Pressure: Pricing continues to remain a major headwind for NuVasive as it experiences declining prices for its products due to intensifying competition in the spine market. Pricing pressure experienced by hospital customers from managed care organizations, insurance providers and other third-party payers is a persistent headwind. Also, increased market power of hospital customers as the medical device industry consolidates is another source of pricing pressure.
Stiff Competition: NuVasive competes with a large number of players, making the medical devices market intensely competitive. The orthopedic industry, in particular, is highly competitive with the presence of bellwethers like Medtronic plc (MDT - Free Report) .
Estimate Trend
NuVasive has been seeing a positive estimate revision trend for 2020. Over the past 90 days, the Zacks Consensus Estimate for its earnings has moved 31.9% north to 95 cents.
The Zacks Consensus Estimate for its third-quarter 2020 revenues is pegged at $256.5 million, suggesting an 11.8% fall from the year-ago number.
Key Picks
Some better-ranked stocks from the broader medical space are QIAGEN N.V. (QGEN - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Boston Scientific’s long-term earnings growth rate is estimated at 10%. The company presently carries a Zacks Rank #2 (Buy).
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Here's Why You Should Hold on to NuVasive (NUVA) Stock Now
NuVasive, Inc. has been gaining on FDA clearances for its products as well as a slew of product launches. Its impressive second-quarter 2020 results buoy optimism as well. However, persistent pricing pressure and a tough competitive landscape are concerning.
Over the past year, the Zacks Rank #3 (Hold) stock has lost 11.3% versus the industry’s 8.1% growth and the S&P 500’s 19.4% rise.
The renowned surgical spine player has a market capitalization of $2.88 billion. The company projects 13.4% growth for the next five years and expects to maintain its strong performance. The company surpassed estimates in the trailing four quarters, the average surprise being 20.16%.
Let’s delve deeper.
Product Launches: We are upbeat about the slew of product launches by NuVasive. The company, in September, announced the limited availability of the latest Precice Plate for use in limb lengthening and reconstruction procedures from NuVasive Specialized Orthopedics. In July, the company launched its Time to Evolve campaign to help provide less-invasive surgical techniques. It also expanded its complex spine portfolio with the global commercial availability of Reline 3D (a posterior fixation system for patients suffering from pediatric spinal deformities) in June.
In May, the company announced the expansion of its Advanced Materials Science implant portfolio with the commercial launch of the Modulus XLIF Dual Sided Plate.
U.S. Surgical Support Prospects Solid: NuVasive’s buyout of Safe Passage in 2019 is encouraging for its Surgical Support business. Per management, the market is gradually experiencing greater adoption and rising demand for its offering of surgical alternatives with less tissue disruption. NuVasive continues to focus on unique spine offerings. Despite the pandemic-led business debacle, the company witnessed volume improvement throughout the second quarter. Additionally, NuVasive Clinical Services continued to drive business and operational efficiencies during this time.
Impressive Q2 Results: NuVasive’s narrower-than-expected loss per share in second-quarter 2020 buoys optimism. The company’s plans to maintain R&D investment instill investor confidence. The X360 system’s potential also buoys optimism. The FDA’s 510(k) clearances for Modulus ALIF and Cohere transforaminal lumbar interbody fusion (TLIF)-O look encouraging.
Downsides
Persistent Pricing Pressure: Pricing continues to remain a major headwind for NuVasive as it experiences declining prices for its products due to intensifying competition in the spine market. Pricing pressure experienced by hospital customers from managed care organizations, insurance providers and other third-party payers is a persistent headwind. Also, increased market power of hospital customers as the medical device industry consolidates is another source of pricing pressure.
Stiff Competition: NuVasive competes with a large number of players, making the medical devices market intensely competitive. The orthopedic industry, in particular, is highly competitive with the presence of bellwethers like Medtronic plc (MDT - Free Report) .
Estimate Trend
NuVasive has been seeing a positive estimate revision trend for 2020. Over the past 90 days, the Zacks Consensus Estimate for its earnings has moved 31.9% north to 95 cents.
The Zacks Consensus Estimate for its third-quarter 2020 revenues is pegged at $256.5 million, suggesting an 11.8% fall from the year-ago number.
Key Picks
Some better-ranked stocks from the broader medical space are QIAGEN N.V. (QGEN - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
QIAGEN’s long-term earnings growth rate is estimated at 17.2%. It currently flaunts a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Boston Scientific’s long-term earnings growth rate is estimated at 10%. The company presently carries a Zacks Rank #2 (Buy).
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>