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Here's Why You Should Avoid Betting on Integer Holdings (ITGR)
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Integer Holdings Corporation’s (ITGR - Free Report) weak segmental and operational performance in third-quarter 2020 failed to impress investors. Moreover, intense competition in the MedTech space remains a concern.
The Zacks Rank #4 (Sell) company — with a market capitalization of $2.33 billion — manufactures and develops medical devices and components primarily for original equipment manufacturers (OEMs), which depend on it to design, develop and produce intellectual property protected medical device technologies.
Shares of the company have lost 3.8% against the industry’s growth of 14.6% in a year’s time. Meanwhile, the S&P 500 Index has rallied 15.5% in the same time frame.
Factors Hurting the Stock
Integer Holdings witnessed weak segmental and operational performance in third-quarter 2020.
With respect to segments, both Medical Sales and Non-Medical Sales experienced decline in revenues. At Medical Sales, revenues were $227.7 million, down 21.3% year over year. Moreover, revenues declined 22.3% from the prior-year quarter on an organic basis. Reported revenues at Non-Medical Sales segment totaled $8.3 million, down 41.7% on both year-over-year and organic basis.
Integer Holdings generated a gross profit of $57.9 million in the second quarter, down 37.9% year over year. As a percentage of revenues, gross margin in quarter contracted 620 basis points (bps) to 24.6%. Total operating income amounted to $39.8 million, which fell 14.5% year over year.
It is worth mentioning that Integer Holdings generates majority of revenues from cardiac, neuromodulation, orthopedics, vascular, advanced surgical and power solutions markets. The company faces intense competition in those areas from players like Medtronic, Boston Scientific, Stryker, Smith & Nephew and ConvaTec. Consequently, stiff competition continues to intensify and impact the company’s prospects.
Which Way Are Estimates Headed?
For 2020, the Zacks Consensus Estimate for revenues is pegged at $1.07 billion, indicating a decline of 15.2% from the prior-year quarter. The same for earnings stands at $2.69 per share, suggesting a fall of 42.5% from the year-ago reported figure.
Cardinal Health has a projected long-term earnings growth rate of 5.4%.
Align Technology has an estimated long-term earnings growth rate of 18.3%.
Thermo Fisher has a projected long-term earnings growth rate of 18%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Here's Why You Should Avoid Betting on Integer Holdings (ITGR)
Integer Holdings Corporation’s (ITGR - Free Report) weak segmental and operational performance in third-quarter 2020 failed to impress investors. Moreover, intense competition in the MedTech space remains a concern.
The Zacks Rank #4 (Sell) company — with a market capitalization of $2.33 billion — manufactures and develops medical devices and components primarily for original equipment manufacturers (OEMs), which depend on it to design, develop and produce intellectual property protected medical device technologies.
Shares of the company have lost 3.8% against the industry’s growth of 14.6% in a year’s time. Meanwhile, the S&P 500 Index has rallied 15.5% in the same time frame.
Factors Hurting the Stock
Integer Holdings witnessed weak segmental and operational performance in third-quarter 2020.
With respect to segments, both Medical Sales and Non-Medical Sales experienced decline in revenues. At Medical Sales, revenues were $227.7 million, down 21.3% year over year. Moreover, revenues declined 22.3% from the prior-year quarter on an organic basis. Reported revenues at Non-Medical Sales segment totaled $8.3 million, down 41.7% on both year-over-year and organic basis.
Integer Holdings generated a gross profit of $57.9 million in the second quarter, down 37.9% year over year. As a percentage of revenues, gross margin in quarter contracted 620 basis points (bps) to 24.6%. Total operating income amounted to $39.8 million, which fell 14.5% year over year.
It is worth mentioning that Integer Holdings generates majority of revenues from cardiac, neuromodulation, orthopedics, vascular, advanced surgical and power solutions markets. The company faces intense competition in those areas from players like Medtronic, Boston Scientific, Stryker, Smith & Nephew and ConvaTec. Consequently, stiff competition continues to intensify and impact the company’s prospects.
Which Way Are Estimates Headed?
For 2020, the Zacks Consensus Estimate for revenues is pegged at $1.07 billion, indicating a decline of 15.2% from the prior-year quarter. The same for earnings stands at $2.69 per share, suggesting a fall of 42.5% from the year-ago reported figure.
Stocks to Consider
Some better-ranked stocks from the broader medical space include Cardinal Health Inc. (CAH - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Thermo Fisher Scientific Inc. (TMO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a projected long-term earnings growth rate of 5.4%.
Align Technology has an estimated long-term earnings growth rate of 18.3%.
Thermo Fisher has a projected long-term earnings growth rate of 18%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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