Surmodics, Inc. (SRDX Quick QuoteSRDX - Free Report) demonstrated strong performance in the last reported quarter. Its loss per share was 51.9% narrower than the market estimate and sales beat the same by 8.3%. The strong performance was driven by the company’s solid prospects in the thrombectomy business.

Meanwhile, SRDX is likely to be acquired by GTCR, a renowned private equity company, for an estimated $627 million in total equity valuation. Although the deal is likely to be closed by March-end taking SRDX private, adding it your portfolio currently may give double-digit returns on closing.

So far this year, this current Zacks Rank #1 (Strong Buy) company’s shares have lost 6.3% against the industry’s 7.2% growth and the S&P 500’s 3% increase.

The renowned medical device and in-vitro diagnostics technology provider has a market capitalization of $493.68 million. Surmodics projects 97.2% growth for fiscal 2025 and expects to maintain its strong performance going forward. SRDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 165.93%.

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Let’s delve deeper.

GTCR Offer: Surmodics, in May, entered into a definitive agreement to be acquired by GTCR. Under the terms of the agreement, affiliates of GTCR, a private equity firm with a long track record of investment expertise across healthcare and healthcare technology, will acquire all outstanding shares of Surmodics. SRDX shareholders will receive $43.00 per share in cash. The addition of the stock to investors’ portfolio at current market price, hovering around $37 per share, may lead to a gain of nearly 15% by March-end.

Thrombectomy Prospects Bright: Surmodics’ aim to leverage its proprietary Pounce thrombectomy platform technology to develop products raises our optimism. In October, Surmodics announced that early results of a subset of 60 real-world acute, subacute and chronic limb ischemia patients from its PROWL registry study were presented at the TCT Symposium in Washington, D.C. The same month, the company received the FDA’s 510(k) clearance for its Pounce XL Thrombectomy System. SRDX is likely to have initiated limited market evaluations of the product, which may generate additional revenues during the first quarter of fiscal 2025.

Strong Q4 Results: Surmodics registered a solid improvement in the overall top and bottom lines for the fourth quarter of fiscal 2024. Sales in the Medical Device segment totaled $25.8 million, up 22.4% from the year-ago level. The revenue growth in the Medical Device segment was primarily driven by product sales, especially Pounce thrombectomy device platform and SurVeil DCB, coupled with an increase in performance coating royalties and license fee revenues. IVD sales improved 7.9% to $7.5 million, primarily driven by growth in sales of distributed antigen and microarray slide/surface products.

Downsides

Regulatory Headwinds: Surmodics’ facilities and procedures are subject to periodic inspections by the FDA to determine compliance with the latter’s requirements. On account of non-compliance with applicable laws or regulations, the FDA could ban such medical devices. Any adverse regulatory action can potentially hurt Surmodics' business practices and operations.

Reliance on Third Parties: A principal element of Surmodics’ business strategy is to enter into licensing arrangements with medical devices and other companies that manufacture products incorporating its technologies.  The company’s revenues from such arrangements depend upon its or its licensees’ ability to successfully develop, obtain regulatory approval for manufacture (if applicable), and market and sell products incorporating Surmodics’ technologies. Any failure to meet these requirements could have an adverse impact on its business.

Surmodics, Inc. Price

Surmodics, Inc. price | Surmodics, Inc. Quote

Estimate Trend

Surmodics is witnessing a positive estimate revision trend for fiscal 2025. In the past 30 days, the Zacks Consensus Estimate for its earnings per share has improved 1 cent to 19 cents.

The consensus estimate for the company’s first-quarter fiscal 2025 revenues is pegged at $33.5 million, suggesting a 9.5% increase from the year-ago reported number. Loss for the period is estimated to be 8 cents per share versus breakeven in the year-ago period.

Other Stocks to Consider

Some other top-ranked stocks in the broader medical space are Masimo (MASI Quick QuoteMASI - Free Report) , Penumbra (PEN Quick QuotePEN - Free Report) and Abbott Laboratories (ABT Quick QuoteABT - Free Report) .

Masimo, carryinga Zacks Rank #2 (Buy) at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 4.7% compared with the industry’s 9.5% growth year to date.

Penumbra, sporting a Zacks Rank #1 at present, has an estimated growth rate of 37.5% for 2025. Its earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%.

PEN’s shares have gained 16.2% compared with the industry’s 9.5% growth so far this year.

Abbott, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 10% for 2025. It delivered a trailing four-quarter average earnings surprise of 1.64%.

ABT’s shares have risen 4.1% so far this year compared with the industry’s 6.9% growth.