On Dec 29, 2017, Entellus Medical Inc.’s shares reached a high of $25.58, closing the session nominally lower at $24.39. The company’s shares have returned 26.5% over the last year, higher than the S&P 500 index’s gain of 18.3%. Also, shares have outperformed the industry’s gain of 23% over the same time frame. The stock has a market cap of $619.14 million.
Considering this, one may expect Entellus to scale new highs in the upcoming quarters. The company delivered a positive earnings surprise of 3.92% in the last quarter. Entellus Medical has an impressive 13.07% growth rate for 2017, which is also encouraging.
Projected sales growth is 28.7% for the first quarter of 2018.
Estimate revision trend for the current year looks impressive. Over the past two months, one estimate has moved north with no movement in the opposite direction. During this period, earnings estimate has narrowed down 22 cents to a loss of $1.33.
Let’s find out whether the company can sustain the positive trend.
What are the Possible Growth Propellers?
Previous Acquisitions, a Positive: Recently, Entellus closed the acquisition of Spirox, which has enhanced market opportunities for the business. This led to the integration of LATERA, a technology which offers less invasive, simple and effective method for treating nasal obstructions.
On Dec 7, 2017 Entellus announced a definitive merger agreement. Per the agreement, Stryker Corporation will acquire Entellus Medical in an all cash transaction for an equity value of approximately $662 million.
Promising Revenue Trends: The third-quarter revenues of Entellus Medical totaled $23.3 million, improving 30% on a year-over-year basis, despite disruption from hurricanes. This includes revenues worth $3.1 million from products acquired in the past 12 months from the acquisition of Spirox. The full-year revenue is expected to grow 22-25% year over year.
New Chief in Operations: Recently, Mike Rosenthal has been announced the new Chief Operating Officer of the company in recent past. He is the former General Manager of Spirox. Rosenthal has more than 20 years of R&D, operations and regulatory experience, including leadership positions at CardioGenesis, FoxHollow and Sawtooth.
Zacks Ranks & Key Picks
Entellus Medical carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical space are Tactile Systems Technology (TCMD - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and ABIOMED Inc. (ABMD - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tactile has a projected long-term growth rate of 20%. The stock has rallied 6.8% in the last 6 months, compared with the industry’s gain of 4.2%.
Integer Holdings has an expected long-term growth rate of 15%. The stock has rallied 50.6% over the last year, higher than the industry’s gain of 22.8%.
ABIOMED’s long-term growth rate is pegged at 31.5%. The stock has returned an impressive 35.3% surpassing the industry’s rally of 4.2% over the last 6 months.
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