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Here's Why Investors Should Retain Integra (IART) Stock Now
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Integra LifeSciences Holdings Corporation (IART - Free Report) is well-poised to grow in the coming quarters, given the healthy demand for its industry-leading products within Codman Specialty Surgical (“CSS”). The company’s strong overseas performance is encouraging, while strategic initiatives undertaken will help reach a wider customer base. In addition, efforts to optimize the portfolio with new acquisitions and product developments buoy optimism. Meanwhile, headwinds from currency fluctuations and escalated expenses remain as concerns for Integra’s operations.
In the past year, this Zacks Rank #3 (Hold) stock has decreased 40% against the industry’s 8.6% rise and the 27.1% increase of the S&P 500 composite.
The renowned medical device company has a market capitalization of $2.67 billion. Integra has an expected earnings growth rate of 13.2% for 2025 compared to the S&P 500’s 8%. In the trailing four quarters, the company delivered an average earnings surprise of 5.2%.
Let’s delve deeper.
Tailwinds
Favorable Prospects of CSS: Integra’s CSS segment is benefiting from the growing market acceptance of the company’s global neurosurgery line-ups, including CSS management and neuromonitoring. Growth within CSS management continues to be driven by the strong market adoption of programmable valves and advanced energy (key revenue-generating products being CUSA Clarity disposables, Certas Programmable Valves, DuraGen, Mayfield Capital, BactiSeal, CerebroFlo EVD catheters and ICP microsensors).
The company has expanded the international reach of the CUSA platform and registered DuraGen, DuraSeal, Mayfield and Duo LED lighting in the EMEA and Latin America. Additionally, Integra introduced DuraGen Plus in China and successfully relaunched CereLink intracranial pressure monitors globally, followed by the 510(k) clearance in the United States in February 2024.
Image Source: Zacks Investment Research
Solid Growth of the International Business: Integra is successfully broadening its international footprint through certain key developments. CSS international sales have been strong recently, driven by growth in the core neurosurgery business and strength in certain key markets, such as Europe, Canada, China and Japan. Per Integra, the acquisition of Codman has effectively doubled the company’s international business within the CSS segment.
On a global basis, the company is accelerating investments in digital capabilities to enable commercial teams to reach a broader customer base. Further, geographic expansions and new product launches are helping it advance its international growth strategy. Integra also took a significant step forward with its In-China-for-China strategy by starting the build-out of a leased manufacturing facility near Shanghai. Strength is also seen in Canada, Australia and Japan.
Emphasis on Portfolio Optimization: Integra has significantly ramped up its investments in research and development to drive innovation and strengthen its portfolio. The 2021 acquisition of ACell, Inc. is expected to drive robust long-term growth for the company. In 2023, Integra launched its ACell portfolio in Europe and received the FDA 510(k) clearance for Aurora Surgiscope.
The company also completed the integration of SIA and advanced with its implant-based breast reconstruction PMA strategy for both SurgiMend and DuraSorb. In March 2024, the company commercially launched the MicroMatrix Flex in the United States. Further, the recent decision to acquire the Acclarent ENT business is expected to strategically add an adjacent, highly complementary and growth-accretive platform to its neurosurgery business.
Headwinds
Rising SG&A Expenses May Strain Margins: Higher freight costs, ongoing labor inflation, and manufacturing and supply-chain inefficiencies have continued to put significant pressure on Integra’s margins in recent times. Integra’s SG&A expenses rose 7.4% during the fourth quarter of 2023. In the quarter, the unfavorable product and geographic mix, as well as Boston recall issue-related expenses, further intensified pressure on the company’s margins.
Foreign Exchange Woes Persist: Integra faces challenges from foreign exchange fluctuations as a significant portion of its revenues come from outside the United States, involving transactions in currencies other than the U.S. dollar. With the recent upward trend observed in the value of the U.S. dollar, further acceleration expected by analysts in this value will cause the company’s revenues to face a tough situation overseas.
Estimate Trend
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved to $3.19 from $3.21 in the past 30 days.
The consensus estimate for the company’s 2024 revenues is pegged at $1.61 billion. This suggests a 4.7% rise from the year-ago reported number.
DaVita has a long-term estimated earnings growth rate of 12.1% compared with the industry’s 11.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 35.6%. Its shares have rallied 61.7% compared with the industry’s 17.6% rise in the past year.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term earnings growth rate of 14.2% compared with the industry’s 11.6%. Shares of the company have increased 37.4% compared with the industry’s 9.7% rise over the past year.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%. In the last reported quarter, it delivered an average earnings surprise of 16.7%.
Stryker, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 11.7% for the next year compared with the S&P 500’s 8%. Shares of SYK have increased 21.4% compared with the industry’s 4.6% rise over the past year.
SYK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.1%. In the last reported quarter, it delivered an average earnings surprise of 5.8%.
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Here's Why Investors Should Retain Integra (IART) Stock Now
Integra LifeSciences Holdings Corporation (IART - Free Report) is well-poised to grow in the coming quarters, given the healthy demand for its industry-leading products within Codman Specialty Surgical (“CSS”). The company’s strong overseas performance is encouraging, while strategic initiatives undertaken will help reach a wider customer base. In addition, efforts to optimize the portfolio with new acquisitions and product developments buoy optimism. Meanwhile, headwinds from currency fluctuations and escalated expenses remain as concerns for Integra’s operations.
In the past year, this Zacks Rank #3 (Hold) stock has decreased 40% against the industry’s 8.6% rise and the 27.1% increase of the S&P 500 composite.
The renowned medical device company has a market capitalization of $2.67 billion. Integra has an expected earnings growth rate of 13.2% for 2025 compared to the S&P 500’s 8%. In the trailing four quarters, the company delivered an average earnings surprise of 5.2%.
Let’s delve deeper.
Tailwinds
Favorable Prospects of CSS: Integra’s CSS segment is benefiting from the growing market acceptance of the company’s global neurosurgery line-ups, including CSS management and neuromonitoring. Growth within CSS management continues to be driven by the strong market adoption of programmable valves and advanced energy (key revenue-generating products being CUSA Clarity disposables, Certas Programmable Valves, DuraGen, Mayfield Capital, BactiSeal, CerebroFlo EVD catheters and ICP microsensors).
The company has expanded the international reach of the CUSA platform and registered DuraGen, DuraSeal, Mayfield and Duo LED lighting in the EMEA and Latin America. Additionally, Integra introduced DuraGen Plus in China and successfully relaunched CereLink intracranial pressure monitors globally, followed by the 510(k) clearance in the United States in February 2024.
Image Source: Zacks Investment Research
Solid Growth of the International Business: Integra is successfully broadening its international footprint through certain key developments. CSS international sales have been strong recently, driven by growth in the core neurosurgery business and strength in certain key markets, such as Europe, Canada, China and Japan. Per Integra, the acquisition of Codman has effectively doubled the company’s international business within the CSS segment.
On a global basis, the company is accelerating investments in digital capabilities to enable commercial teams to reach a broader customer base. Further, geographic expansions and new product launches are helping it advance its international growth strategy. Integra also took a significant step forward with its In-China-for-China strategy by starting the build-out of a leased manufacturing facility near Shanghai. Strength is also seen in Canada, Australia and Japan.
Emphasis on Portfolio Optimization: Integra has significantly ramped up its investments in research and development to drive innovation and strengthen its portfolio. The 2021 acquisition of ACell, Inc. is expected to drive robust long-term growth for the company. In 2023, Integra launched its ACell portfolio in Europe and received the FDA 510(k) clearance for Aurora Surgiscope.
The company also completed the integration of SIA and advanced with its implant-based breast reconstruction PMA strategy for both SurgiMend and DuraSorb. In March 2024, the company commercially launched the MicroMatrix Flex in the United States. Further, the recent decision to acquire the Acclarent ENT business is expected to strategically add an adjacent, highly complementary and growth-accretive platform to its neurosurgery business.
Headwinds
Rising SG&A Expenses May Strain Margins: Higher freight costs, ongoing labor inflation, and manufacturing and supply-chain inefficiencies have continued to put significant pressure on Integra’s margins in recent times. Integra’s SG&A expenses rose 7.4% during the fourth quarter of 2023. In the quarter, the unfavorable product and geographic mix, as well as Boston recall issue-related expenses, further intensified pressure on the company’s margins.
Foreign Exchange Woes Persist: Integra faces challenges from foreign exchange fluctuations as a significant portion of its revenues come from outside the United States, involving transactions in currencies other than the U.S. dollar. With the recent upward trend observed in the value of the U.S. dollar, further acceleration expected by analysts in this value will cause the company’s revenues to face a tough situation overseas.
Estimate Trend
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved to $3.19 from $3.21 in the past 30 days.
The consensus estimate for the company’s 2024 revenues is pegged at $1.61 billion. This suggests a 4.7% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks from the broader medical space are DaVita (DVA - Free Report) , Cardinal Health (CAH - Free Report) and Stryker (SYK - Free Report) .
DaVita has a long-term estimated earnings growth rate of 12.1% compared with the industry’s 11.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 35.6%. Its shares have rallied 61.7% compared with the industry’s 17.6% rise in the past year.
DVA sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term earnings growth rate of 14.2% compared with the industry’s 11.6%. Shares of the company have increased 37.4% compared with the industry’s 9.7% rise over the past year.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%. In the last reported quarter, it delivered an average earnings surprise of 16.7%.
Stryker, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 11.7% for the next year compared with the S&P 500’s 8%. Shares of SYK have increased 21.4% compared with the industry’s 4.6% rise over the past year.
SYK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.1%. In the last reported quarter, it delivered an average earnings surprise of 5.8%.