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Conmed (CNMD) Up 14.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Conmed (CNMD - Free Report) . Shares have added about 14.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Conmed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CONMED Beats on Q3 Earnings, Ups ’23 EPS View
CONMED delivered adjusted earnings per share (EPS) of 90 cents in third-quarter 2023, which beat the Zacks Consensus Estimate of 83 cents by 8.4%. The bottom line also improved 16.9% from the year-ago quarter’s level.
GAAP EPS for the quarter was 50 cents against a reported loss of $1.48 per share in the year-ago period.
Revenues in Detail
CONMED’s revenues totaled $304.6 million, up 10.7% year over year. The top line beat the Zacks Consensus Estimate by 3.9%. At constant exchange rate (CER), revenues increased 11.9%. Additional sales from the newly acquired businesses contributed approximately 40 basis points of growth.
CNMD’s third-quarter sales were driven by strong growth in the U.S. as well as international markets. The company’s two products, In2Bones and Biorez, were the key drivers during the reported quarter. However, its legacy orthopedic business was hurt by supply constraints.
Segmental Details
Revenues in the Orthopedic Surgery segment totaled $124.7 million, up 5.1% from the year-ago quarter’s level on a reported basis. At CER, revenues increased 6.4%.
The top line improved 1.3% on a reported basis on the domestic front. It also increased 7.5% (9.7% at CER) from the prior-year quarter’s level on the international front.
Revenues in the General Surgery segment amounted to $179.9 million, up 15% year over year on a reported basis and 16% at CER. Domestically, the figure increased 12.9% year over year. International sales improved 12.3% on a reported basis (15.1% at CER).
Sales by Geography
Sales in the United States totaled $170.5 million, up 9.5% year over year. International sales amounted to $134.1 million, up 12.3% year over year on a reported basis and 15.1% at CER.
Margins
CONMED’s gross profit improved 12.5% to $170.3 million. The gross margin improved 80 basis points to 55.9%.
Selling & administrative expenses increased 9.3% to $125.3 million. Research and development expenses rose 2.4% year over year to $12.5 million.
The company recorded an operating income of $30.3 million compared with $24.2 million in the prior-year quarter.
2023 Guidance
Based on strong third-quarter results, CONMED raised the lower-end of its previous guidance for earnings and revenues in 2023. The company now expects revenues between $1.24 billion and $1.26 billion for full-year 2023, implying growth of 18.1-20% over 2022.
Previously, it expected revenues between $1.23 billion and $1.26 billion. The Zacks Consensus Estimate for the same is currently pegged at $1.25 billion.
Adjusted EPS is now expected in the range of $3.45-$3.55, up from the previous projection of $3.40-$3.55. The Zacks Consensus Estimate for the same is currently pegged at $3.48. The current EPS guidance indicates an improvement of 30.2-34% year over year.
CNMD continues to expect foreign exchange to have an unfavorable impact on its top-line growthby 150-200 basis points in 2023. Currency rates are expected to negatively impact EPS by 20-25 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Conmed has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Conmed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Conmed (CNMD) Up 14.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Conmed (CNMD - Free Report) . Shares have added about 14.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Conmed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CONMED Beats on Q3 Earnings, Ups ’23 EPS View
CONMED delivered adjusted earnings per share (EPS) of 90 cents in third-quarter 2023, which beat the Zacks Consensus Estimate of 83 cents by 8.4%. The bottom line also improved 16.9% from the year-ago quarter’s level.
GAAP EPS for the quarter was 50 cents against a reported loss of $1.48 per share in the year-ago period.
Revenues in Detail
CONMED’s revenues totaled $304.6 million, up 10.7% year over year. The top line beat the Zacks Consensus Estimate by 3.9%. At constant exchange rate (CER), revenues increased 11.9%. Additional sales from the newly acquired businesses contributed approximately 40 basis points of growth.
CNMD’s third-quarter sales were driven by strong growth in the U.S. as well as international markets. The company’s two products, In2Bones and Biorez, were the key drivers during the reported quarter. However, its legacy orthopedic business was hurt by supply constraints.
Segmental Details
Revenues in the Orthopedic Surgery segment totaled $124.7 million, up 5.1% from the year-ago quarter’s level on a reported basis. At CER, revenues increased 6.4%.
The top line improved 1.3% on a reported basis on the domestic front. It also increased 7.5% (9.7% at CER) from the prior-year quarter’s level on the international front.
Revenues in the General Surgery segment amounted to $179.9 million, up 15% year over year on a reported basis and 16% at CER. Domestically, the figure increased 12.9% year over year. International sales improved 12.3% on a reported basis (15.1% at CER).
Sales by Geography
Sales in the United States totaled $170.5 million, up 9.5% year over year. International sales amounted to $134.1 million, up 12.3% year over year on a reported basis and 15.1% at CER.
Margins
CONMED’s gross profit improved 12.5% to $170.3 million. The gross margin improved 80 basis points to 55.9%.
Selling & administrative expenses increased 9.3% to $125.3 million. Research and development expenses rose 2.4% year over year to $12.5 million.
The company recorded an operating income of $30.3 million compared with $24.2 million in the prior-year quarter.
2023 Guidance
Based on strong third-quarter results, CONMED raised the lower-end of its previous guidance for earnings and revenues in 2023. The company now expects revenues between $1.24 billion and $1.26 billion for full-year 2023, implying growth of 18.1-20% over 2022.
Previously, it expected revenues between $1.23 billion and $1.26 billion. The Zacks Consensus Estimate for the same is currently pegged at $1.25 billion.
Adjusted EPS is now expected in the range of $3.45-$3.55, up from the previous projection of $3.40-$3.55. The Zacks Consensus Estimate for the same is currently pegged at $3.48. The current EPS guidance indicates an improvement of 30.2-34% year over year.
CNMD continues to expect foreign exchange to have an unfavorable impact on its top-line growthby 150-200 basis points in 2023. Currency rates are expected to negatively impact EPS by 20-25 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Conmed has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Conmed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.