Back to top

Haemonetics (HAE) Grows on Strong Plasma, Competition Rife

Read MoreHide Full Article

On Nov 14, we issued an updated research report on Haemonetics Corporation (HAE - Free Report) . The company has been trading above the broader industry over the last month. The stock has gained 19.9% as against the broader industry’s 0.5% gain. The stock has also outperformed the S&P 500’s 1.2% gain. The stock currently carries a Zacks Rank #3 (Hold).

Haemonetics exited second-quarter fiscal 2018 on a promising note, with year-over-year growth in earnings and revenues. Continued expansion in newer geographies has helped the company deliver strong results in the recent past. Meanwhile, the company’s strong cash position boosts investors’s confidence. The company is also optimistic about strong market adoption of its NexSys PCS plasmapheresis system which recently received FDA approval. Further, the raised fiscal 2018 adjusted earnings guidance is encouraging.

Market is upbeat about Haemonetics’ encouraging growth in both Plasma and Haemonetics Management franchises. Plasma continued to witness strong growth in the second quarter with 5.7% rise in revenues at constant currency. In the quarter, North America Plasma disposables revenues increased 7%. Growth continued to be led by strong end-market demand for plasma-derived biopharmaceuticals. Haemonetics is confident about maintaining growth in the commercial Plasma collection business.

 

 

On the flip side, the company has been witnessing sluggish revenue growth at the Blood Center franchise, significantly affecting its results over the past few quarters. Management also doesn’t expect any early recovery in the Blood Center’s outcomes.

Macroeconomic uncertainty continues to pose a challenge for Haemonetics. Management also anticipates slower-than-expected product adoption by customers which might reduce revenues and profits. Also, currency fluctuations and stiff competition continue to hamper the stock. Contraction in gross and operating margin is also discouraging.

Key Picks

A few better-ranked medical stocks are PetMed Express, Inc. (PETS - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Myriad Genetics, Inc. (MYGN - Free Report) . Notably, PetMed, Align Technology and Myriad Genetics sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 71.8% over the last year.

Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has gained 170.1% in the last year.

Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has gained 87.1% in the last year.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>



More from Zacks Analyst Blog

You May Like