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Here's Why You Should Add Haemonetics (HAE) to Your Portfolio
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Haemonetics Corporation (HAE - Free Report) is gaining on continued strong growth in Plasma franchise. New product launches such as the TEG 6s PlateletMapping cartridge and the U.S. trauma indication is driving overall growth. Its better-than-expected third-quarter fiscal 2021 results buoy optimism. However, persistent fall in blood center revenues and an expensive valuation are concerns.
In the past year, shares of this Zacks Rank #2 (Buy) company have gained 19.9% in the past year compared with the industry’s 45.4% growth and the S&P 500’s 61.6% rise.
The renowned provider of blood management solutions has a market capitalization of $5.82 billion. The company projects 10% growth for the next five years. The company surpassed estimates in three of the trailing four quarters and missed estimates in the other one. It has a trailing four-quarter earnings surprise of 12.5%, on average.
Let’s delve deeper
Impressive Q3 Results: We are optimistic about Haemonetics’ third-quarter fiscal 2021 better-than-expected results. The company’s Hospital business was robust along with uptick in the Hemostasis Management product line. Adoption of NexSys is contributing to the company’s overall progress and the company is optimistic about the Cardiva acquisition. Gross productivity improvement and cost savings from the Operational Excellence Program and cost-containment actions raise optimism. A strong solvency and balance sheet position bodes well for the company.
Upside Potential of Plasma Franchise: We are upbeat about Haemonetics’ Plasma segment (company’s largest business segment), which is witnessing strong growth for quite some time. Haemonetics is currently witnessing plasma market growth above historic rates driven by an industry striving to double collections by 2025 and the rising demand for plasma-based medicines. The company continued to benefit from the NexSys device and NexLynk donor management software backed by increased customer adoptions.
Hemostasis Management Franchise Prospect Bright: Hemostasis Management saw strong growth in the past few quarters. Organic revenue growth in the Hemostasis Management product line was 11.3%. The product line benefited from strong capital equipment sales in the United States and sales of TEG cartridges in Europe, which drove the overall product line up by 6% year to date.
However, Blood Center business revenues declined 1.4% in the quarter primarily due to lower-than-usual volumes because of COVID-19, previously discontinued customer contracts and overall declines in blood utilization rates.
Haemonetics’ P/S (F12M) ratio is expensive in comparison to the broader industry, which is discouraging. The company is currently trading at a forward P/S (F12M basis) ratio of 7.1 for the past year, whereas the current P/S ratio (F12 basis) for the industry is at 3.9.
Estimate Trends
Haemonetics has been witnessing a positive estimate revision trend for 2021. In the past 60 days, the Zacks Consensus Estimate for earnings has moved 5.71% south to $2.59.
The Zacks Consensus Estimate for fourth-quarter fiscal 2021 revenues is pegged at $223.4 million, suggesting a 6.31% fall from the year-ago quartert’s number.
Envista has an estimated long-term earnings growth rate of 24.4%.
Meridian Bioscience has a projected long-term earnings growth rate of 55.1%.
Owens & Minor has an estimated long-term earnings growth rate of 48.9%.
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Here's Why You Should Add Haemonetics (HAE) to Your Portfolio
Haemonetics Corporation (HAE - Free Report) is gaining on continued strong growth in Plasma franchise. New product launches such as the TEG 6s PlateletMapping cartridge and the U.S. trauma indication is driving overall growth. Its better-than-expected third-quarter fiscal 2021 results buoy optimism. However, persistent fall in blood center revenues and an expensive valuation are concerns.
In the past year, shares of this Zacks Rank #2 (Buy) company have gained 19.9% in the past year compared with the industry’s 45.4% growth and the S&P 500’s 61.6% rise.
The renowned provider of blood management solutions has a market capitalization of $5.82 billion. The company projects 10% growth for the next five years. The company surpassed estimates in three of the trailing four quarters and missed estimates in the other one. It has a trailing four-quarter earnings surprise of 12.5%, on average.
Let’s delve deeper
Impressive Q3 Results: We are optimistic about Haemonetics’ third-quarter fiscal 2021 better-than-expected results. The company’s Hospital business was robust along with uptick in the Hemostasis Management product line. Adoption of NexSys is contributing to the company’s overall progress and the company is optimistic about the Cardiva acquisition. Gross productivity improvement and cost savings from the Operational Excellence Program and cost-containment actions raise optimism. A strong solvency and balance sheet position bodes well for the company.
Upside Potential of Plasma Franchise: We are upbeat about Haemonetics’ Plasma segment (company’s largest business segment), which is witnessing strong growth for quite some time. Haemonetics is currently witnessing plasma market growth above historic rates driven by an industry striving to double collections by 2025 and the rising demand for plasma-based medicines. The company continued to benefit from the NexSys device and NexLynk donor management software backed by increased customer adoptions.
Hemostasis Management Franchise Prospect Bright: Hemostasis Management saw strong growth in the past few quarters. Organic revenue growth in the Hemostasis Management product line was 11.3%. The product line benefited from strong capital equipment sales in the United States and sales of TEG cartridges in Europe, which drove the overall product line up by 6% year to date.
However, Blood Center business revenues declined 1.4% in the quarter primarily due to lower-than-usual volumes because of COVID-19, previously discontinued customer contracts and overall declines in blood utilization rates.
Haemonetics’ P/S (F12M) ratio is expensive in comparison to the broader industry, which is discouraging. The company is currently trading at a forward P/S (F12M basis) ratio of 7.1 for the past year, whereas the current P/S ratio (F12 basis) for the industry is at 3.9.
Estimate Trends
Haemonetics has been witnessing a positive estimate revision trend for 2021. In the past 60 days, the Zacks Consensus Estimate for earnings has moved 5.71% south to $2.59.
The Zacks Consensus Estimate for fourth-quarter fiscal 2021 revenues is pegged at $223.4 million, suggesting a 6.31% fall from the year-ago quartert’s number.
Other Key Picks
Some other-ranked stocks from the broader medical space are Envista Holdings Corporation (NVST - Free Report) , Meridian Bioscience, Inc. and Owens & Minor, Inc. (OMI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Envista has an estimated long-term earnings growth rate of 24.4%.
Meridian Bioscience has a projected long-term earnings growth rate of 55.1%.
Owens & Minor has an estimated long-term earnings growth rate of 48.9%.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%.
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>