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Haemonetics (HAE) Stock Up 4.2% YTD: Will the Rally Continue?
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Haemonetics Corporation (HAE - Free Report) shares have increased 4.2% year to date against the industry’s decline of 5.8%. The Medical sector has dropped 8.4% in the said time frame. The company has a market capitalization of $4.16 billion.
The consistent growth performance over the past few quarters reflecting its strategic focus on establishing leading positions in high-growth markets to generate solid financial returns is likely to drive this Zacks Rank 2 (Buy) stock.
Its earnings are expected to grow by 10% in the next five years. HAE’s ROE for the trailing 12 months was 22.3%, better than the industry average of (17.1%).
Will the Upside Continue?
The Zacks Consensus Estimate for HAE’s 2023 earnings is pegged at $3.89,indicating a 28.4% increase from the year-ago reported figure. The consensus estimate for 2023 revenues is pegged at $1.27 billion, indicating a year-over-year improvement of 8.7%.
Haemonetics has been benefiting from the strong momentum in collections. In the United States, its second-quarter fiscal 2023 marked its eighth consecutive quarter of growth exceeding historical seasonality, driven by an industry striving to double collections by 2025 and the rising demand for plasma-based medicines.
In terms of the latest developments, North America disposables grew 9%, disproportionately driven by growth in volume and price among customers on NexSys with Persona. The company noted taking the necessary steps to support the demand for disposables and reinforce its market-leading position through additional innovation that reduces the cost per liter. For the full year, HAE increased its Plasma organic revenue growth guidance from 8% to 11%, up to 10% to 12%.
On a promising note, Haemonetics continues to expand the hospital business with procedure-enabling technologies in high-growth areas like interventional cardiology and electrophysiology, creating additional opportunities in the total addressable market of nearly $3.7 billion. With the commercial strategy set on targeting the top 600 U.S. hospitals, the company is making significant progress, strengthening its relationship with the top accounts responsible for nearly 90% of procedures.
Image Source: Zacks Investment Research
Further, a strong solvency position is an added advantage. Haemonetics exited the fiscal second quarter with cash and cash equivalents of $351 million and an insignificantly low short-term debt & current maturities of $14 million. The long-term debt was $748.7 million compared with $751.4 million at the end of the fiscal first quarter. The company anticipates utilizing the growing capital capacity throughout its long-term plan to accelerate top and bottom-line growth through organic and inorganic growth investments and opportunistic share buybacks.
Raised guidance is an indicator of future growth. For 2024, the company expects total GAAP revenue growth in the range of 7-9% on a reported basis (earlier guidance was 6-9%). Organic revenue growth is anticipated to be 8-10% (earlier guidance was 7-10%). HAE expects the full-year adjusted earnings per share in the band of $3.75-$3.95 ($3.60-$3.90).
Estimate Trends
The Zacks Consensus Estimate for HAE’s 2023 and 2024 has moved 1.8% and 1.9% north, respectively, in the past 90 days, reflecting analysts’ optimism.
Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Biodesix (BDSX - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 18.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 30.6% year to date compared with the industry’s 1.6% growth.
Biodesix, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.76%.
Biodesix’s shares have declined 36.5% year to date against the industry’s 12.6% decline.
Integer Holdings, sporting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 30.6% year to date against the industry’s 7.3% decline.
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Haemonetics (HAE) Stock Up 4.2% YTD: Will the Rally Continue?
Haemonetics Corporation (HAE - Free Report) shares have increased 4.2% year to date against the industry’s decline of 5.8%. The Medical sector has dropped 8.4% in the said time frame. The company has a market capitalization of $4.16 billion.
The consistent growth performance over the past few quarters reflecting its strategic focus on establishing leading positions in high-growth markets to generate solid financial returns is likely to drive this Zacks Rank 2 (Buy) stock.
Its earnings are expected to grow by 10% in the next five years. HAE’s ROE for the trailing 12 months was 22.3%, better than the industry average of (17.1%).
Will the Upside Continue?
The Zacks Consensus Estimate for HAE’s 2023 earnings is pegged at $3.89,indicating a 28.4% increase from the year-ago reported figure. The consensus estimate for 2023 revenues is pegged at $1.27 billion, indicating a year-over-year improvement of 8.7%.
Haemonetics has been benefiting from the strong momentum in collections. In the United States, its second-quarter fiscal 2023 marked its eighth consecutive quarter of growth exceeding historical seasonality, driven by an industry striving to double collections by 2025 and the rising demand for plasma-based medicines.
In terms of the latest developments, North America disposables grew 9%, disproportionately driven by growth in volume and price among customers on NexSys with Persona. The company noted taking the necessary steps to support the demand for disposables and reinforce its market-leading position through additional innovation that reduces the cost per liter. For the full year, HAE increased its Plasma organic revenue growth guidance from 8% to 11%, up to 10% to 12%.
On a promising note, Haemonetics continues to expand the hospital business with procedure-enabling technologies in high-growth areas like interventional cardiology and electrophysiology, creating additional opportunities in the total addressable market of nearly $3.7 billion. With the commercial strategy set on targeting the top 600 U.S. hospitals, the company is making significant progress, strengthening its relationship with the top accounts responsible for nearly 90% of procedures.
Further, a strong solvency position is an added advantage. Haemonetics exited the fiscal second quarter with cash and cash equivalents of $351 million and an insignificantly low short-term debt & current maturities of $14 million. The long-term debt was $748.7 million compared with $751.4 million at the end of the fiscal first quarter. The company anticipates utilizing the growing capital capacity throughout its long-term plan to accelerate top and bottom-line growth through organic and inorganic growth investments and opportunistic share buybacks.
Raised guidance is an indicator of future growth. For 2024, the company expects total GAAP revenue growth in the range of 7-9% on a reported basis (earlier guidance was 6-9%). Organic revenue growth is anticipated to be 8-10% (earlier guidance was 7-10%). HAE expects the full-year adjusted earnings per share in the band of $3.75-$3.95 ($3.60-$3.90).
Estimate Trends
The Zacks Consensus Estimate for HAE’s 2023 and 2024 has moved 1.8% and 1.9% north, respectively, in the past 90 days, reflecting analysts’ optimism.
Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Biodesix (BDSX - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 18.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 30.6% year to date compared with the industry’s 1.6% growth.
Biodesix, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.76%.
Biodesix’s shares have declined 36.5% year to date against the industry’s 12.6% decline.
Integer Holdings, sporting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 30.6% year to date against the industry’s 7.3% decline.