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Reasons to Retain Surmodics (SRDX) Stock in Your Portfolio
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Surmodics, Inc. (SRDX - Free Report) is well poised for growth in the coming quarters, backed by its solid prospects in the thrombectomy business over the past few months. A robust second-quarter fiscal 2022 performance and progress with the TRANSCEND trial are expected to contribute further. Yet, concerns related to data security threats and reliance on third parties persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 32.2% compared with 30.5% fall of the industry and 9.9% decline of the S&P 500 composite.
The renowned medical device and in-vitro diagnostics technology provider has a market capitalization of $503.4 million. Surmodics projects 115.7% growth for fiscal 2023, expecting to maintain its strong performance. SRDX’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in the other, the average earnings surprise being 25.2%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Progress With TRANSCEND: Surmodics received investigational device exemption approval from the FDA for its SurVeil drug-coated balloon (“DCB”) pivotal study named TRANSCEND. SurVeil is a paclitaxel DCB used for the treatment of femoral-popliteal disease. During its fiscal 2022 second-quarter earnings call, Surmodics confirmed that it was anticipating that the 24-month TRANSCEND clinical data will be presented at an upcoming conference later this fall. The expectation continues to be that the U.S. launch of SurVeil will follow the receipt of the pre-market approval.
Thrombectomy Prospects Bright: Surmodics’ aim to leverage its proprietary Pounce thrombectomy platform technology to develop products raises our optimism. In April, Surmodics announced that its Pounce Thrombectomy System achieved 100% technical success in 20 FIH procedures. Additionally, the data showed that no adjunctive thrombectomy devices were required to remove clots and 95% of these procedures could be performed while avoiding the use of thrombolytics within the target lesion.
Strong Q2 Results: Surmodics’ solid second-quarter fiscal 2022 results buoy optimism about the stock. The company registered robust revenues from its IVD segment, as well as from its Product sales. Surmodics confirmed making crucial progress on its SurVeil DCB pre-market approval submission. Strong potential in the company’s Sublime Radial Access device and Pounce Arterial Thrombectomy platform raises our optimism about the stock.
Downsides
Data Security Threats: Surmodics collects and stores sensitive data, including intellectual property, its proprietary business information and that of its customers, suppliers and business partners, on its networks. The secure maintenance of this information is critical to its operations and business strategy, and the company’s customers expect that it will securely maintain their information. Despite Surmodics’ security measures, its information technology and infrastructure may be vulnerable to attacks by hackers resulting from employee error, malfeasance or other disruptions.
Reliance on Third Parties: A principal element of Surmodics’ business strategy is to enter into licensing arrangements with medical device and other companies that manufacture products incorporating its technologies. The amount of revenues the company derives from such arrangements depends upon its ability or its licensees’ ability to successfully develop, obtain regulatory approval for, manufacture (if applicable), market and sell products incorporating Surmodics’ technologies.
Estimate Trend
Surmodics is witnessing a negative estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has widened from a loss of $1.10 to $1.15 per share.
The Zacks Consensus Estimate for the company’s third-quarter fiscal 2022 revenues is pegged at $25.5 million, suggesting a 6.7% improvement from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
AMN Healthcare has gained 24.4% against the industry’s 30.8% fall in the past year.
Patterson Companies, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has gained 0.8% against the industry’s 9.1% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.5%. MCK’s earnings surpassed estimates in three of the trailing four quarters, the average beat being 19.5%.
McKesson has gained 75.1% against the industry’s 9.1% fall over the past year.
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Reasons to Retain Surmodics (SRDX) Stock in Your Portfolio
Surmodics, Inc. (SRDX - Free Report) is well poised for growth in the coming quarters, backed by its solid prospects in the thrombectomy business over the past few months. A robust second-quarter fiscal 2022 performance and progress with the TRANSCEND trial are expected to contribute further. Yet, concerns related to data security threats and reliance on third parties persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 32.2% compared with 30.5% fall of the industry and 9.9% decline of the S&P 500 composite.
The renowned medical device and in-vitro diagnostics technology provider has a market capitalization of $503.4 million. Surmodics projects 115.7% growth for fiscal 2023, expecting to maintain its strong performance. SRDX’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in the other, the average earnings surprise being 25.2%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Progress With TRANSCEND: Surmodics received investigational device exemption approval from the FDA for its SurVeil drug-coated balloon (“DCB”) pivotal study named TRANSCEND. SurVeil is a paclitaxel DCB used for the treatment of femoral-popliteal disease. During its fiscal 2022 second-quarter earnings call, Surmodics confirmed that it was anticipating that the 24-month TRANSCEND clinical data will be presented at an upcoming conference later this fall. The expectation continues to be that the U.S. launch of SurVeil will follow the receipt of the pre-market approval.
Thrombectomy Prospects Bright: Surmodics’ aim to leverage its proprietary Pounce thrombectomy platform technology to develop products raises our optimism. In April, Surmodics announced that its Pounce Thrombectomy System achieved 100% technical success in 20 FIH procedures. Additionally, the data showed that no adjunctive thrombectomy devices were required to remove clots and 95% of these procedures could be performed while avoiding the use of thrombolytics within the target lesion.
Strong Q2 Results: Surmodics’ solid second-quarter fiscal 2022 results buoy optimism about the stock. The company registered robust revenues from its IVD segment, as well as from its Product sales. Surmodics confirmed making crucial progress on its SurVeil DCB pre-market approval submission. Strong potential in the company’s Sublime Radial Access device and Pounce Arterial Thrombectomy platform raises our optimism about the stock.
Downsides
Data Security Threats: Surmodics collects and stores sensitive data, including intellectual property, its proprietary business information and that of its customers, suppliers and business partners, on its networks. The secure maintenance of this information is critical to its operations and business strategy, and the company’s customers expect that it will securely maintain their information. Despite Surmodics’ security measures, its information technology and infrastructure may be vulnerable to attacks by hackers resulting from employee error, malfeasance or other disruptions.
Reliance on Third Parties: A principal element of Surmodics’ business strategy is to enter into licensing arrangements with medical device and other companies that manufacture products incorporating its technologies. The amount of revenues the company derives from such arrangements depends upon its ability or its licensees’ ability to successfully develop, obtain regulatory approval for, manufacture (if applicable), market and sell products incorporating Surmodics’ technologies.
Estimate Trend
Surmodics is witnessing a negative estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has widened from a loss of $1.10 to $1.15 per share.
The Zacks Consensus Estimate for the company’s third-quarter fiscal 2022 revenues is pegged at $25.5 million, suggesting a 6.7% improvement from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 24.4% against the industry’s 30.8% fall in the past year.
Patterson Companies, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has gained 0.8% against the industry’s 9.1% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.5%. MCK’s earnings surpassed estimates in three of the trailing four quarters, the average beat being 19.5%.
McKesson has gained 75.1% against the industry’s 9.1% fall over the past year.