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Reasons to Add Merit Medical (MMSI) Stock to Your Portfolio
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Merit Medical Systems, Inc. (MMSI - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2022 performance, along with its solid international exposure, is expected to contribute further. However, headwinds related to higher consolidation in the healthcare industry and the lack of direct sales and marketing capabilities persist.
So far this year, this Zacks Rank #2 (Buy) stock has gained 12.9% against a 16.8% decline of the industry and a 18.1% decline of the S&P 500.
This renowned medical-devices provider has a market capitalization of $3.98 billion. The company is projected to record 11% growth over the next five years on the back of its continued strong segmental performance. It delivered an earnings surprise of 25.35% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about Merit Medical’s continued gains on the significant momentum of its new products. We are also optimistic about the company’s product pipeline, including radio and electrophysiology products. Last month, the company announced the launch of the SCOUT Mini Reflector, which has been designed for use in soft tissues, such as breast and lymph nodes.
The company, in April, launched the ReSolve Thoracostomy Tray, which has all products needed for performing a thoracostomy.
International Exposure: We are upbeat about Merit Medical’s current global operations, including its territories in Europe, the Middle East, Africa, Asia, Oceania, Central and South America, Mexico, and Canada. In the third quarter of 2022, Merit Medical confirmed that its international sales (42.7% of net sales) improved 6.1% from the corresponding period of 2021. This included increased sales of 5.7% in APAC operations, 17.4% in Rest of the World operations and 4.7% in EMEA operations, reportedly.
Strong Q3 Results: Merit Medical’s robust third-quarter 2022 results buoy optimism. The company also saw solid segmental growth and growth across all product categories within its Cardiovascular unit. Solid product sales and robust performances in both the United States and outside were also witnessed. Strong execution and improving customer demand trends raised the overall top line. Expansion of the adjusted operating margin also bodes well.
Risk
Lack of Direct Sales and Marketing Capabilities: Merit Medical lacks direct sales and marketing capabilities in many countries. The company wholly depends on third-party distributors for the commercialization of products in countries like China, Japan, Russia and India. Per management, because of inefficiencies in the distributor base, Merit Medical often fails to successfully commercialize its products in these countries.
Merit Medical is witnessing a rising estimate trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved north from $2.47 to $2.57.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $289.76 million, suggesting a 4.1% rise from the year-ago quarter’s reported number. The consensus estimate for earnings stands at 67 cents per share, implying a decline of 5.6% year over year.
The Zacks Consensus Estimate for ShockWave Medical’s earnings per share is stable at $2.57 for 2022 and rose from $3.42 to $3.56 for 2023 in the past 60 days. SWAV has gained 43.1% so far this year.
ShockWave Medical delivered an earnings surprise of 146.1%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN stock has declined 1.6% so far this year.
AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.
McKesson’s earnings per share estimates have increased from $24.42 to $24.75 for fiscal 2023 and $26.04 to $26.40 for fiscal 2024 in the past 60 days. MCK has gained 55.2% so far this year.
McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.
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Reasons to Add Merit Medical (MMSI) Stock to Your Portfolio
Merit Medical Systems, Inc. (MMSI - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2022 performance, along with its solid international exposure, is expected to contribute further. However, headwinds related to higher consolidation in the healthcare industry and the lack of direct sales and marketing capabilities persist.
So far this year, this Zacks Rank #2 (Buy) stock has gained 12.9% against a 16.8% decline of the industry and a 18.1% decline of the S&P 500.
This renowned medical-devices provider has a market capitalization of $3.98 billion. The company is projected to record 11% growth over the next five years on the back of its continued strong segmental performance. It delivered an earnings surprise of 25.35% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about Merit Medical’s continued gains on the significant momentum of its new products. We are also optimistic about the company’s product pipeline, including radio and electrophysiology products. Last month, the company announced the launch of the SCOUT Mini Reflector, which has been designed for use in soft tissues, such as breast and lymph nodes.
The company, in April, launched the ReSolve Thoracostomy Tray, which has all products needed for performing a thoracostomy.
International Exposure: We are upbeat about Merit Medical’s current global operations, including its territories in Europe, the Middle East, Africa, Asia, Oceania, Central and South America, Mexico, and Canada. In the third quarter of 2022, Merit Medical confirmed that its international sales (42.7% of net sales) improved 6.1% from the corresponding period of 2021. This included increased sales of 5.7% in APAC operations, 17.4% in Rest of the World operations and 4.7% in EMEA operations, reportedly.
Strong Q3 Results: Merit Medical’s robust third-quarter 2022 results buoy optimism. The company also saw solid segmental growth and growth across all product categories within its Cardiovascular unit. Solid product sales and robust performances in both the United States and outside were also witnessed. Strong execution and improving customer demand trends raised the overall top line. Expansion of the adjusted operating margin also bodes well.
Risk
Lack of Direct Sales and Marketing Capabilities: Merit Medical lacks direct sales and marketing capabilities in many countries. The company wholly depends on third-party distributors for the commercialization of products in countries like China, Japan, Russia and India. Per management, because of inefficiencies in the distributor base, Merit Medical often fails to successfully commercialize its products in these countries.
Merit Medical Systems, Inc. Price
Merit Medical Systems, Inc. price | Merit Medical Systems, Inc. Quote
Estimate Trend
Merit Medical is witnessing a rising estimate trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved north from $2.47 to $2.57.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $289.76 million, suggesting a 4.1% rise from the year-ago quarter’s reported number. The consensus estimate for earnings stands at 67 cents per share, implying a decline of 5.6% year over year.
Other Stocks to Consider
Some other top-ranked stocks in the broader medical space are ShockWave Medical (SWAV - Free Report) , AMN Healthcare Services (AMN - Free Report) and McKesson (MCK - Free Report) , all carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ShockWave Medical’s earnings per share is stable at $2.57 for 2022 and rose from $3.42 to $3.56 for 2023 in the past 60 days. SWAV has gained 43.1% so far this year.
ShockWave Medical delivered an earnings surprise of 146.1%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN stock has declined 1.6% so far this year.
AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.
McKesson’s earnings per share estimates have increased from $24.42 to $24.75 for fiscal 2023 and $26.04 to $26.40 for fiscal 2024 in the past 60 days. MCK has gained 55.2% so far this year.
McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.