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Here's Why You Should Retain Haemonetics (HAE) Stocks for Now
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Haemonetics Corporation (HAE - Free Report) is well-poised for growth in the coming quarters, backed by recovery across businesses, mainly at Hospital, and the initial Plasma Persona rollouts. Strong customer end-market demand for NexSys PCS system with Persona technology buoys optimism. However, economic uncertainty and stiff competition remain concerns.
Over the past six months, the Zacks Rank #3 (Hold) stock has lost 16.2% against 8.5% fall of the industry and a 9.3% rise of the S&P 500.
The renowned medical device company has a market capitalization of $2.72 billion. The company projects 10% growth for the next five years and expects to maintain strong segmental performance.
Let’s delve deeper.
Key Growth Catalysts
Recovery Across Businesses: The fiscal second quarter saw encouraging performance by Haemonetics’ businesses, supported by strong procedure recovery in the hospital business, the resilience of blood donors in blood centers, and initial rollouts of the Persona technology and plasma. In the fiscal second quarter, Plasma collections in Europe showed continued recovery, specifically in Czech Republic and Hungary, driven by fewer COVID-related restrictions and plasma center growth. The hospital business revenues grew 49.7% in the quarter, primarily driven by continued improvement in hospital procedures on increased utilization of disposables, strong capital sales in North America, and new business opportunities in Europe.
Potential Upsides of Plasma Franchise: Haemonetics has been witnessing strong growth in Plasma franchise for quite some time. In the global plasma market, Haemonetics holds an 80% share approximately. 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 (DMS) backed by increased customer adoptions. The company anticipates strong plasma collection recoveries in the second half of the year, with a firm fiscal 2022 organic revenue growth of 10% to 20%.
Image Source: Zacks Investment Research
Huge Potential of Hemostasis Management Franchise: Under the Hospital business, Hemostasis Management saw strong growth over the past few quarters. Hemostasis Management revenues rose 21% in the fiscal second quarter. The company witnessed growth in the utilization of products and strong capital sales as it continued to penetrate underserved cell elastic testing markets. North America -- the largest market -- led the charge in adopting TEG 6s devices and increased utilization of cartridges benefiting from a second consecutive quarter of record capital sales.
Downsides
Economic Uncertainty a Concern: The uncertain economic scenario continues to pose a challenge for Haemonetics. The company has been progressing with blood management solutions even though economic challenges negatively impact the attempt. Unstable macroeconomic conditions due to the coronavirus outbreak are concerning.
Competitive Landscape: Haemonetics operates in a very competitive environment, both for manual and automated systems, including companies like MAK Systems, ROTEM analyzers, Medtronic, e Fresenius, MacoPharma and Terumo.
Estimate Trend
Over the past 90 days, the Zacks Consensus Estimate for Haemonetics’ earnings has moved down 8.3% to $2.54.
The Zacks Consensus Estimate for fiscal 2022 revenues is pegged at $995.9 million, suggesting a 14.4% rise from the year-ago reported number.
Thermo Fisher, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
LabCorp, carrying a Zacks Rank #2, reported third-quarter 2021 adjusted EPS of $6.82, which surpassed the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the Zacks Consensus Estimate by 13.4%.
LabCorp has an estimated long-term growth rate of 10.6%. LH surpassed estimates in the trailing four quarters, the average surprise being 25.7%.
Medpace reported third-quarter 2021 adjusted EPS of $1.29, surpassing the Zacks Consensus Estimate by 20.6%. Revenues of $295.57 million beat the Zacks Consensus Estimate by 1.2%.
Medpace has an estimated long-term growth rate of 16.4%. MEDP surpassed estimates in the trailing four quarters, the average surprise being 11.9%. It currently sports a Zacks Rank #2.
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Here's Why You Should Retain Haemonetics (HAE) Stocks for Now
Haemonetics Corporation (HAE - Free Report) is well-poised for growth in the coming quarters, backed by recovery across businesses, mainly at Hospital, and the initial Plasma Persona rollouts. Strong customer end-market demand for NexSys PCS system with Persona technology buoys optimism. However, economic uncertainty and stiff competition remain concerns.
Over the past six months, the Zacks Rank #3 (Hold) stock has lost 16.2% against 8.5% fall of the industry and a 9.3% rise of the S&P 500.
The renowned medical device company has a market capitalization of $2.72 billion. The company projects 10% growth for the next five years and expects to maintain strong segmental performance.
Let’s delve deeper.
Key Growth Catalysts
Recovery Across Businesses: The fiscal second quarter saw encouraging performance by Haemonetics’ businesses, supported by strong procedure recovery in the hospital business, the resilience of blood donors in blood centers, and initial rollouts of the Persona technology and plasma. In the fiscal second quarter, Plasma collections in Europe showed continued recovery, specifically in Czech Republic and Hungary, driven by fewer COVID-related restrictions and plasma center growth. The hospital business revenues grew 49.7% in the quarter, primarily driven by continued improvement in hospital procedures on increased utilization of disposables, strong capital sales in North America, and new business opportunities in Europe.
Potential Upsides of Plasma Franchise: Haemonetics has been witnessing strong growth in Plasma franchise for quite some time. In the global plasma market, Haemonetics holds an 80% share approximately. 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 (DMS) backed by increased customer adoptions. The company anticipates strong plasma collection recoveries in the second half of the year, with a firm fiscal 2022 organic revenue growth of 10% to 20%.
Huge Potential of Hemostasis Management Franchise: Under the Hospital business, Hemostasis Management saw strong growth over the past few quarters. Hemostasis Management revenues rose 21% in the fiscal second quarter. The company witnessed growth in the utilization of products and strong capital sales as it continued to penetrate underserved cell elastic testing markets. North America -- the largest market -- led the charge in adopting TEG 6s devices and increased utilization of cartridges benefiting from a second consecutive quarter of record capital sales.
Downsides
Economic Uncertainty a Concern: The uncertain economic scenario continues to pose a challenge for Haemonetics. The company has been progressing with blood management solutions even though economic challenges negatively impact the attempt. Unstable macroeconomic conditions due to the coronavirus outbreak are concerning.
Competitive Landscape: Haemonetics operates in a very competitive environment, both for manual and automated systems, including companies like MAK Systems, ROTEM analyzers, Medtronic, e Fresenius, MacoPharma and Terumo.
Estimate Trend
Over the past 90 days, the Zacks Consensus Estimate for Haemonetics’ earnings has moved down 8.3% to $2.54.
The Zacks Consensus Estimate for fiscal 2022 revenues is pegged at $995.9 million, suggesting a 14.4% rise from the year-ago reported number.
Key Picks
Few better-ranked stocks from the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , Laboratory Corporation of America Holdings (LH - Free Report) , or LabCorp and Medpace Holdings, Inc. (MEDP - Free Report) . You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
LabCorp, carrying a Zacks Rank #2, reported third-quarter 2021 adjusted EPS of $6.82, which surpassed the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the Zacks Consensus Estimate by 13.4%.
LabCorp has an estimated long-term growth rate of 10.6%. LH surpassed estimates in the trailing four quarters, the average surprise being 25.7%.
Medpace reported third-quarter 2021 adjusted EPS of $1.29, surpassing the Zacks Consensus Estimate by 20.6%. Revenues of $295.57 million beat the Zacks Consensus Estimate by 1.2%.
Medpace has an estimated long-term growth rate of 16.4%. MEDP surpassed estimates in the trailing four quarters, the average surprise being 11.9%. It currently sports a Zacks Rank #2.