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Merit Medical (MMSI) Hits 52-Week High: What's Driving It?
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Shares of Merit Medical Systems, Inc. (MMSI - Free Report) scaled a new 52-week high of $73.69 on Dec 2, before closing the session marginally lower at $73.04.
In the past year, this Zacks Rank #2 (Buy) stock has gained 11.4% against a 5.9% decline of the industry and the S&P 500 composite’s fall of 12.8%.
In the past five years, the company registered earnings growth of 17.4% compared with the industry’s 11.9% rise. The company’s long-term expected growth rate of 11% compares with the industry’s growth projection of 9.5%. Merit Medical’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 25.4%.
Merit Medical is witnessing an upward trend in its stock price, prompted by its product launches. The optimism led by solid third-quarter 2022 performance and potential in its Cardiovascular unit are expected to contribute. However, stiff competition and a lack of direct sales and marketing capabilities persist.
Image Source: Zacks Investment Research
Let’s delve deeper.
Key Growth Drivers
Product Launches: Investors are optimistic about Merit Medical’s recent series of product launches. Last month, the company announced the U.S. commercial release of the basixALPHA Inflation Device, which is the latest addition to Merit Medical’s inflation device portfolio.
Also in November, Merit Medical announced the U.S. commercial release of the PreludeSYNC EZ Radial Compression Device, which is the latest in the company’s ongoing efforts to advance transradial access for endovascular patient care.
Potential in Cardiovascular Unit: Investors are optimistic about the unit’s robust potential. During the third quarter of 2022, Merit Medical witnessed a solid uptick in its Cardiovascular unit’s year-over-year revenues on a reported and constant exchange rate, organic basis. Revenues in the unit’s majority of the product categories — Peripheral Intervention, Cardiac Intervention and original equipment manufacturer — were also robust during the third quarter.
Strong Q3 Results: Merit Medical’s robust third-quarter 2022 results buoy optimism. The company’s year-over-year uptick in the top and bottom lines were impressive. Merit Medical saw revenue growth in both Cardiovascular and Endoscopy segments and across the majority of its product categories within its Cardiovascular unit. Solid product sales were also promising. Robust performances in the United States and outside were impressive. Strong execution and improving customer demand trends pushed up the overall top line, which is encouraging.
Downsides
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 to commercialize products in these countries. These countries include China, Japan, Russia and India. Per management, Merit Medical often fails to commercialize its products in these countries because of inefficiencies in the distributor base.
Stiff Competition: Merit Medical operates in highly competitive markets, where it faces competition from many companies with greater resources and market presence. The company competes globally in several market areas, including radiology, diagnostics and interventional cardiology. Such resources and market presence may enable the competitors to market competing products more efficiently or at reduced prices to gain market share.
Key Picks
A few other top-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
AMN Healthcare has gained 11.4% against the industry’s 26.3% decline in the past year.
ShockWave Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 21.2% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.
ShockWave Medical has gained 40.9% against the industry’s 20.9% decline over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.
McKesson has gained 72.7% against the industry’s 5.9% decline over the past year.
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Merit Medical (MMSI) Hits 52-Week High: What's Driving It?
Shares of Merit Medical Systems, Inc. (MMSI - Free Report) scaled a new 52-week high of $73.69 on Dec 2, before closing the session marginally lower at $73.04.
In the past year, this Zacks Rank #2 (Buy) stock has gained 11.4% against a 5.9% decline of the industry and the S&P 500 composite’s fall of 12.8%.
In the past five years, the company registered earnings growth of 17.4% compared with the industry’s 11.9% rise. The company’s long-term expected growth rate of 11% compares with the industry’s growth projection of 9.5%. Merit Medical’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 25.4%.
Merit Medical is witnessing an upward trend in its stock price, prompted by its product launches. The optimism led by solid third-quarter 2022 performance and potential in its Cardiovascular unit are expected to contribute. However, stiff competition and a lack of direct sales and marketing capabilities persist.
Image Source: Zacks Investment Research
Let’s delve deeper.
Key Growth Drivers
Product Launches: Investors are optimistic about Merit Medical’s recent series of product launches. Last month, the company announced the U.S. commercial release of the basixALPHA Inflation Device, which is the latest addition to Merit Medical’s inflation device portfolio.
Also in November, Merit Medical announced the U.S. commercial release of the PreludeSYNC EZ Radial Compression Device, which is the latest in the company’s ongoing efforts to advance transradial access for endovascular patient care.
Potential in Cardiovascular Unit: Investors are optimistic about the unit’s robust potential. During the third quarter of 2022, Merit Medical witnessed a solid uptick in its Cardiovascular unit’s year-over-year revenues on a reported and constant exchange rate, organic basis. Revenues in the unit’s majority of the product categories — Peripheral Intervention, Cardiac Intervention and original equipment manufacturer — were also robust during the third quarter.
Strong Q3 Results: Merit Medical’s robust third-quarter 2022 results buoy optimism. The company’s year-over-year uptick in the top and bottom lines were impressive. Merit Medical saw revenue growth in both Cardiovascular and Endoscopy segments and across the majority of its product categories within its Cardiovascular unit. Solid product sales were also promising. Robust performances in the United States and outside were impressive. Strong execution and improving customer demand trends pushed up the overall top line, which is encouraging.
Downsides
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 to commercialize products in these countries. These countries include China, Japan, Russia and India. Per management, Merit Medical often fails to commercialize its products in these countries because of inefficiencies in the distributor base.
Stiff Competition: Merit Medical operates in highly competitive markets, where it faces competition from many companies with greater resources and market presence. The company competes globally in several market areas, including radiology, diagnostics and interventional cardiology. Such resources and market presence may enable the competitors to market competing products more efficiently or at reduced prices to gain market share.
Key Picks
A few other top-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 11.4% against the industry’s 26.3% decline in the past year.
ShockWave Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 21.2% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.
ShockWave Medical has gained 40.9% against the industry’s 20.9% decline over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.
McKesson has gained 72.7% against the industry’s 5.9% decline over the past year.