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Haemonetics (HAE) Hits 52-Week High: What's Aiding the Stock?
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Shares of Haemonetics Corporation (HAE - Free Report) scaled a new 52-week high of $77.22 on Aug 18, before closing the session marginally lower at $76.21.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 27.8% against the 45.8% fall of the industry and 4.6% decline of the S&P 500 composite.
Haemonetics is witnessing an upward trend in its stock price, prompted by its potential in its Plasma franchise. A solid fourth-quarter fiscal 2022 performance, along with recovery across its businesses, is expected to contribute further. However, stiff competition and economic uncertainty persist.
Image Source: Zacks Investment Research
Let’s delve deeper.
Key Growth Drivers
Potential Upsides of Plasma Franchise: Investors have been optimistic about Haemonetics’ strong growth in the Plasma franchise 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 adoption.
During the fiscal fourth quarter, Plasma revenue grew 10% driven by growth in volume.
Recovery Across Businesses: Investors are upbeat about Haemonetics’ businesses’ encouraging performance in the fiscal fourth quarter. This was owing to strong procedure recovery in the hospital business, the resilience of blood donors in blood centers, and rollouts of Persona technology and NexSys.
The hospital business revenues grew 19% in the quarter, primarily driven by a continued rebound in procedures amid challenges posed by hospital staffing shortages and supply-chain disruptions in the Asia Pacific. Plasma collections also continued to recover during the quarter. The company anticipates strong demand for plasma-derived therapies and capital investments by customers to contribute to the ongoing rebound in plasma collections as the effects of the pandemic fade.
Strong Q4 Results: Haemonetics’ robust fourth-quarter fiscal 2022 results buoy optimism. During the quarter, the company registered year-over-year growth in revenues driven by recovery across businesses. The robust performance in the Hospital business on continued strength in the Hemostasis Management product line buoys optimism. Strong customer end-market demand for NexSys PCS system with Persona technology is encouraging. The expansion of the gross margin is an added advantage.
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 the attempt is negatively impacted by economic challenges. Moreover, a stronger dollar, causing significant currency fluctuations, has been affecting the company’s outcome over the past few quarters, and no respite is expected in the near term. Unstable macroeconomic conditions due to the coronavirus outbreak are another headwind trailing the company.
Competitive Landscape: Haemonetics operates in a very competitive environment, both for manual and automated systems, which includes biggies like Medtronic plc (MDT - Free Report) , among others. Slower-than-expected product adoption by customers, especially the American Red Cross, might reduce the company’s revenues and profit.
Other Key Picks
A couple of other top-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) and Patterson Companies, Inc. (PDCO - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
AMN Healthcare has lost 2.6% compared with the industry’s 29.9% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 7.9%. 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 6.7% fall over the past year.
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Haemonetics (HAE) Hits 52-Week High: What's Aiding the Stock?
Shares of Haemonetics Corporation (HAE - Free Report) scaled a new 52-week high of $77.22 on Aug 18, before closing the session marginally lower at $76.21.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 27.8% against the 45.8% fall of the industry and 4.6% decline of the S&P 500 composite.
Haemonetics is witnessing an upward trend in its stock price, prompted by its potential in its Plasma franchise. A solid fourth-quarter fiscal 2022 performance, along with recovery across its businesses, is expected to contribute further. However, stiff competition and economic uncertainty persist.
Image Source: Zacks Investment Research
Let’s delve deeper.
Key Growth Drivers
Potential Upsides of Plasma Franchise: Investors have been optimistic about Haemonetics’ strong growth in the Plasma franchise 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 adoption.
During the fiscal fourth quarter, Plasma revenue grew 10% driven by growth in volume.
Recovery Across Businesses: Investors are upbeat about Haemonetics’ businesses’ encouraging performance in the fiscal fourth quarter. This was owing to strong procedure recovery in the hospital business, the resilience of blood donors in blood centers, and rollouts of Persona technology and NexSys.
The hospital business revenues grew 19% in the quarter, primarily driven by a continued rebound in procedures amid challenges posed by hospital staffing shortages and supply-chain disruptions in the Asia Pacific. Plasma collections also continued to recover during the quarter. The company anticipates strong demand for plasma-derived therapies and capital investments by customers to contribute to the ongoing rebound in plasma collections as the effects of the pandemic fade.
Strong Q4 Results: Haemonetics’ robust fourth-quarter fiscal 2022 results buoy optimism. During the quarter, the company registered year-over-year growth in revenues driven by recovery across businesses. The robust performance in the Hospital business on continued strength in the Hemostasis Management product line buoys optimism. Strong customer end-market demand for NexSys PCS system with Persona technology is encouraging. The expansion of the gross margin is an added advantage.
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 the attempt is negatively impacted by economic challenges. Moreover, a stronger dollar, causing significant currency fluctuations, has been affecting the company’s outcome over the past few quarters, and no respite is expected in the near term. Unstable macroeconomic conditions due to the coronavirus outbreak are another headwind trailing the company.
Competitive Landscape: Haemonetics operates in a very competitive environment, both for manual and automated systems, which includes biggies like Medtronic plc (MDT - Free Report) , among others. Slower-than-expected product adoption by customers, especially the American Red Cross, might reduce the company’s revenues and profit.
Other Key Picks
A couple of other top-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) and Patterson Companies, Inc. (PDCO - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has lost 2.6% compared with the industry’s 29.9% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 7.9%. 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 6.7% fall over the past year.