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Here's Why You Should Retain Inari Medical (NARI) Stock Now

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Inari Medical, Inc. (NARI - Free Report) is well-poised for growth, backed by its commitment to understanding the venous system and a huge market opportunity for products. However, dependency on the broad adoption of products is a concern.

Shares of this Zacks Rank #3 (Hold) stock have lost 25% compared with the industry’s decline of 27.9% on a year-to-date basis. The S&P 500 Index has fallen 20% in the same time frame.

NARI — with a market capitalization of $3.67 billion — is a commercial-stage medical device company that seeks to develop products to treat and change the lives of patients suffering from venous diseases. The company’s earnings yield of (0.9%) compares favorably with the industry’s (9.2%). It beat earnings estimates in three of the trailing four quarters and matched in one quarter, with the average surprise being 15.81%.

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What’s Driving Its Performance?

Inari Medical is spearheading the creation and commercialization of devices that are purposefully built, keeping in mind the specific characteristics of the venous system, its diseases and its unique clot morphology. The company’s commitment to understanding the venous system and in-depth knowledge of its target market has allowed it to figure out the unmet needs of its patients and physicians. This, in turn, has enabled NARI to quickly innovate and improve its products while informing its clinical and educational programs.

In October, Inari Medical announced positive in-hospital and 30-day outcomes data from the fully-enrolled CLOUT deep vein thrombosis registry. The company also reported positive results from a propensity-matched comparison of patients treated in the CLOUT registry compared to patients treated with pharmacomechanical thrombolysis in an NIH-sponsored randomized controlled trial — ATTRACT. The analysis showed that patients had complete thrombus clearance following treatment with the ClotTriever system at nearly twice the rate of patients in the intervention arm of ATTRACT. ClotTriever also resulted in significantly fewer patients with post-thrombotic syndrome (PTS), with an absolute reduction of 13% at 30 days. The trial data demonstrated that ClotTriever removed more clots than other interventional options and resulted in better patient outcomes and lower PTS rates, which will likely result in higher adoption of the treatment among physicians and patients.

Earlier this year, the company announced favorable outcomes of the fully enrolled 800-patient FLASH registry in pulmonary embolism (PE). The primary endpoint of the registry was successfully met by FlowTriever for the treatment of PE. The company is also conducting a PEERLESS randomized controlled trial in PE patients.

Inari Medical stated that a significant percentage of DVT and PE patients are treated with conservative medical management that involves anticoagulants alone, which do not break down or remove an existing clot. Consequently, the company believes that there is a huge untapped demand for safe and effective treatment and removal of the existing clot in patients with these diseases.

The company received FDA clearance for Artix in March. This product is a peripheral thrombectomy device developed to cater to unmet needs in a new patient population. It is the first component of a broader toolbox that the company is in the process of developing. Last year, the company completed its limited market release on ClotTriever Bold and moved to full-market release. Bold is a more aggressive version of the company’s original ClotTriever device.

Revenues during the third quarter of 2022 surged 32% from the prior-year quarter, driven by strong procedural growth across both ClotTriever and FlowTriever product lines. The positive trial data is likely to boost top-line growth further going forward.             During the third quarter, Inari launched two new products — Protrieve and InThrill —  bringing its total new product launches this year to six. The company believes InThrill represents an additional $1 billion market opportunity.

What’s Weighing on the Company?

Most of Inari Medical’s product sales and revenues come from a limited number of hospitals. The company’s growth and profitability mainly depend on its ability to boost physician and patient awareness of its products and how keen physicians and hospitals are to adopt its products and perform catheter-based thrombectomy procedures for the treatment of venous thromboembolism.

The company’s inability to show the benefits of its products and catheter-based thrombectomy procedures will result in limited adoption of the same. It might not happen as quickly as expected, negatively impacting its business and financial condition.

Estimates Trend

For 2022, the Zacks Consensus Estimate for revenues is pegged at $374.7 million, indicating an improvement of 35.3% from the year-ago period’s reported figure. Revenues are anticipated to grow by almost 20% in 2023. The same for the bottom line stands at a loss of 61 cents per share in 2022. It had reported adjusted earnings per share of 18 cents in the year-ago period. Earnings estimates indicate a 62.3% improvement in 2023.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Elevance Health (ELV - Free Report) , Merit Medical Systems (MMSI - Free Report) and HealthEquity (HQY - Free Report) , each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Elevance Health’s earnings per share has risen from $28.97 to $29.02 for 2022 and from $32.58 to $32.63 for 2023 in the past 60 days. ELV has rallied 10.2% so far this year. Elevance Health delivered an earnings surprise of 4.11%, on average, in the last four quarters.

Estimates for Merit Medical Systems have improved from earnings of $2.47 to $2.57 for 2022 and $2.77 to $2.82 for 2023 in the past 60 days. MMSI stock has risen 13.1% so far this year. Merit Medical Systems delivered an earnings surprise of 25.35%, on average, in the last four quarters.

Estimates for HealthEquity’s earnings per share have increased from $1.28 to $1.29 for fiscal 2023 and from $1.76 to $1.79 for fiscal 2024 in the past 60 days. HQY has rallied 39.6% so far this year. HealthEquity’s earnings are anticipated to improve 26.3% over the next five years.

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