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Here's Why You Should Retain Penumbra (PEN) Stock for Now
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Penumbra, Inc. (PEN - Free Report) is likely to grow in the coming quarters, backed by the strength exhibited in the Thrombectomy business. Immersive Healthcare business, too, is making significant progress. However, the impact of macroeconomic concerns and forex woes are headwinds.
In the past year, this Zacks Rank #3 (Hold) stock has risen 0.4% compared with the industry’s 20.6% rise and the S&P 500’s 20.5% rise.
The global healthcare provider company has a market capitalization of $8.67 billion. PEN surpassed earnings estimates in each of the trailing four quarters, the average surprise being 53.84%.
Key Growth Catalysts
Strong Portfolio Expansion: Penumbra is still in the early stages of its journey to bring the company’s proprietary thrombectomy technologies to patients in the United States and around internationally. In terms of Lightning Bolt 7, Penumbra witnessed an acceleration in Lightning Bolt 7 cases in the past few months as conversion from surgery, lytics and other mechanical thrombectomy products are gaining momentum. Through 2023, Lightning Flash and Lightning Bolt 7 delivered strong growth for the company’s U.S. arterial and venous franchises, changing the trajectory of treatment in Venous thromboembolism (VTE) and arterial thrombectomy.
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Robust Thrombectomy Business Growth: Penumbra is demonstrating strong growth within the company’s Thrombectomy business, banking on the rapid increase in sales of the company’s vascular thrombectomy products in the United States as well as its CAVT line of products. In this region, the company is benefitting from sales of new products and further market penetration of existing products. In the fourth quarter of 2023, the company delivered more than 20% year-over-year growth in stroke thrombectomy in the United States, with RED 72 with SENDit technology continuing to set the standard for the market in aspiration catheters and laying the groundwork for Thunderbolt.
Global Expansion Continues: Penumbra derives a significant portion of its revenue internationally (28.5% in 2023). The company projects early success with the launch of its first-generation computer-aided products in Europe. Penumbra plans to expand access to its most-advanced thrombectomy products to its international vascular teams in the next few years. The company’s international teams and partners envision enormous potential to further expand the company’s leadership in stroke intervention outside the United States with SENDit and Thunderbolt over the coming years. Among the recent developments, in 2023, the company launched the RED catheter for stroke and the first-generation computer-orchestrated thrombectomy products Lightning 12 and 7 in Europe.
Downsides
Macroeconomic Concerns: While the pandemic has subsided, it continued to have a widespread impact on global supply chains and labor markets. These have resulted in cost inflation and raw material supply constraints and an increase in employee turnover rates in certain jurisdictions. All these factors are putting significant pressure on Penumbra’s profitability.
Foreign Exchange Impacts Sales: A significant portion of Penumbra’s sales and costs are exposed to changes in foreign exchange rates. In 2023, approximately 29% of the company's consolidated revenues came from the non-U.S. markets. The company’s operations use multiple foreign currencies, including the euro and Japanese yen. Changes in those currencies relative to the U.S. dollar will impact its sales, cost of sales and expenses, and consequently, net income.
Estimate Trends
In the past 30 days, the Zacks Consensus Estimate for Penumbra’s 2024 earnings has remained constant at $2.85.
The Zacks Consensus Estimate for 2024 revenues is pegged at $1.24 billion, indicating a 17.5% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2, reported first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion increased 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.
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Here's Why You Should Retain Penumbra (PEN) Stock for Now
Penumbra, Inc. (PEN - Free Report) is likely to grow in the coming quarters, backed by the strength exhibited in the Thrombectomy business. Immersive Healthcare business, too, is making significant progress. However, the impact of macroeconomic concerns and forex woes are headwinds.
In the past year, this Zacks Rank #3 (Hold) stock has risen 0.4% compared with the industry’s 20.6% rise and the S&P 500’s 20.5% rise.
The global healthcare provider company has a market capitalization of $8.67 billion. PEN surpassed earnings estimates in each of the trailing four quarters, the average surprise being 53.84%.
Key Growth Catalysts
Strong Portfolio Expansion: Penumbra is still in the early stages of its journey to bring the company’s proprietary thrombectomy technologies to patients in the United States and around internationally. In terms of Lightning Bolt 7, Penumbra witnessed an acceleration in Lightning Bolt 7 cases in the past few months as conversion from surgery, lytics and other mechanical thrombectomy products are gaining momentum. Through 2023, Lightning Flash and Lightning Bolt 7 delivered strong growth for the company’s U.S. arterial and venous franchises, changing the trajectory of treatment in Venous thromboembolism (VTE) and arterial thrombectomy.
Robust Thrombectomy Business Growth: Penumbra is demonstrating strong growth within the company’s Thrombectomy business, banking on the rapid increase in sales of the company’s vascular thrombectomy products in the United States as well as its CAVT line of products. In this region, the company is benefitting from sales of new products and further market penetration of existing products. In the fourth quarter of 2023, the company delivered more than 20% year-over-year growth in stroke thrombectomy in the United States, with RED 72 with SENDit technology continuing to set the standard for the market in aspiration catheters and laying the groundwork for Thunderbolt.
Global Expansion Continues: Penumbra derives a significant portion of its revenue internationally (28.5% in 2023). The company projects early success with the launch of its first-generation computer-aided products in Europe. Penumbra plans to expand access to its most-advanced thrombectomy products to its international vascular teams in the next few years. The company’s international teams and partners envision enormous potential to further expand the company’s leadership in stroke intervention outside the United States with SENDit and Thunderbolt over the coming years. Among the recent developments, in 2023, the company launched the RED catheter for stroke and the first-generation computer-orchestrated thrombectomy products Lightning 12 and 7 in Europe.
Downsides
Macroeconomic Concerns: While the pandemic has subsided, it continued to have a widespread impact on global supply chains and labor markets. These have resulted in cost inflation and raw material supply constraints and an increase in employee turnover rates in certain jurisdictions. All these factors are putting significant pressure on Penumbra’s profitability.
Foreign Exchange Impacts Sales: A significant portion of Penumbra’s sales and costs are exposed to changes in foreign exchange rates. In 2023, approximately 29% of the company's consolidated revenues came from the non-U.S. markets. The company’s operations use multiple foreign currencies, including the euro and Japanese yen. Changes in those currencies relative to the U.S. dollar will impact its sales, cost of sales and expenses, and consequently, net income.
Estimate Trends
In the past 30 days, the Zacks Consensus Estimate for Penumbra’s 2024 earnings has remained constant at $2.85.
The Zacks Consensus Estimate for 2024 revenues is pegged at $1.24 billion, indicating a 17.5% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2, reported first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion increased 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.