CONMED Corporation (CNMD Quick QuoteCNMD - Free Report) is well-positioned for growth on the back of rising adoption of its high-margin, differentiated platforms like AirSeal, Buffalo Filter and BioBrace. The company’s long-term prospects seem good as robotic procedure volume rises, coupled with the expanding penetration of Ambulatory Surgery Centers. Moreover, improving supply-chain bottlenecks should drive top- and bottom-line growth.

CONMED is facing tariff headwinds that are unfavorably impacting its earnings per share (EPS) and revenue expansion. Higher operating expense investments remain a concern.

Shares of this Zacks Rank #3 (Hold) company have lost 9.9% in the year-to-date period compared with the industry’s 3.3% decline and the S&P 500 Index’s 3.6% fall.

CONMED, a renowned global medical products manufacturer specializing in surgical instruments and devices, has a market capitalization of $1.06 billion. The company projects 5.2% earnings growth over the next five years.

The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.56%.

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Factors Favoring CNMD Stock

Strong Growth Drivers in High-Margin Segment: CONMED delivered a strong fourth-quarter fiscal 2025 performance, led by robust orthopedic growth, solid execution and continued expansion of its higher-margin platforms. Looking ahead to fiscal 2026, management plans to stay focused on three key growth drivers, AirSeal insufflation systems, Buffalo Filter and BioBrace, which offer favorable procedural growth and margin profiles. AirSeal remains significantly underpenetrated in traditional laparoscopy, currently used in just 6–7% of the more than 3 million annual U.S. procedures, leaving ample room for long-term expansion as adoption improves.

Buffalo Filter continues to benefit from a growing global smoke evacuation market exceeding $1 billion, supported by increasing regulatory mandates such as smoke-free operating room laws across multiple U.S. states, as well as adoption in Nordic countries and Canada. Meanwhile, BioBrace is gaining traction across more than 70 surgical applications, with new product innovations and ongoing clinical validation strengthening its adoption. Collectively, these platforms underscore CONMED’s strategy to prioritize R&D, commercial execution and capital allocation toward high-growth, high-margin opportunities.

Supply-Chain Normalization Boosting Orthopedics Recovery: Resolving the sports medicine supply-chain constraints remains a central operational priority entering fiscal 2026. During fiscal 2025, the company invested in additional planning capabilities, infrastructure, external operational expertise and leadership resources, including back-order levels and the number of affected SKUs declining to a three-year low by year-end.

This improvement enabled the orthopedics segment to return to stronger growth, with fourth-quarter orthopedic sales rising 12.1% in constant currency, reflecting both improving product availability and continued demand for key offerings such as BioBrace and other soft-tissue repair solutions.

Management’s near-term objective is to stabilize and scale supply processes to ensure consistent product availability, while the long-term objective is to build a more agile, data-driven, high-performance supply chain to support sustained innovation and above-market growth in the orthopedic portfolio over time.

Margin Improvement Initiatives and Capital Returns: Several structural actions underway are expected to strengthen profitability and shareholder returns beginning in fiscal 2026 and continuing thereafter. The strategic exit from the gastroenterology product lines is intended to concentrate resources on higher-growth, higher-margin businesses. It is expected to improve the company’s consolidated long-term gross margin profile by 80 basis points (bps) once the transition is completed.

For fiscal 2026, CONMED guided to an additional 50 to 100 bps of gross-margin expansion, driven by favorable product mix and cost improvements. The company suspended its dividend and authorized a $150 million share repurchase program, with management indicating that redeploying the prior dividend amount toward buybacks is expected to contribute 7 cents of EPS accretion in fiscal 2026, supporting ongoing capital-return priorities while maintaining flexibility to invest in innovation and growth initiatives.

Downsides of CNMD Stock

Revenue & EPS Headwinds From GI Exit and Tariffs: While CNMD is positioning itself for stronger long-term growth and profitability, near-term challenges tied to strategic portfolio changes and external cost pressures remain. Management expects fiscal 2026 revenue growth to be moderate, with constant-currency organic growth of 4.5% to 6%, impacted by the shift away from lower-priority product lines. U.S. general surgery performance has also been affected by portfolio rationalization, including the exit of select smaller products, reduced focus on OEM smoke-evacuation offerings and the broader exit from the gastroenterology business.

Adjusted EPS is projected to be in the range of $4.30 to $4.45, down from $4.59 in fiscal 2025, reflecting a 45–50 cent hit from the GI exit and an additional 30–35 cent drag from tariff-related costs. Despite these pressures, management views the GI exit as a strategic move to enhance long-term margins and prioritize higher-growth areas.

Rising Operating Expense Investments: Operating expenses are anticipated to increase in fiscal 2026 as the company ramps up investments to drive its core growth platforms and strengthen its innovation pipeline. Adjusted SG&A expenses are expected to reach 38% to 38.5% of sales, influenced by lower revenues following the exit of the GI portfolio and higher commercial spending to support the expansion of key surgical and orthopedic businesses. Meanwhile, R&D spending is projected to rise to 4.5% to 5% of sales, marking an increase from previous years as CNMD allocates more resources toward product development, clinical research and technological advancements in areas such as robotic and laparoscopic surgery, smoke evacuation and soft-tissue repair.

Estimate Trend

CONMED is witnessing a stable estimate revision trend for fiscal 2026. In the past 60 days, the Zacks Consensus Estimate for earnings has remained stable at $4.36 per share.

The Zacks Consensus Estimate for first-quarter fiscal 2026 revenues and EPS is pegged at $310.7 million and 82 cents, respectively, suggesting 3.3% and 13.7% declines from the year-ago reported numbers.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Phibro Animal Health (PAHC Quick QuotePAHC - Free Report) , GE HealthCare Technologies (GEHC Quick QuoteGEHC - Free Report) and Cardinal Health (CAH Quick QuoteCAH - Free Report) .

Phibro Animal Health, currently sporting a Zacks Rank #1 (Strong Buy), reported second-quarter fiscal 2026 adjusted EPS of 87 cents, which surpassed the Zacks Consensus Estimate by 27.1%. Revenues of $373.9 million beat the Zacks Consensus Estimate by 4.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12% rise. The company’s earnings beat estimates in the trailing four quarters, the average surprise being 20.1%.

GE HealthCare Technologies, currently carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2025 adjusted EPS of $1.44, which surpassed the Zacks Consensus Estimate by 0.7%. Revenues of $5.7 billion beat the Zacks Consensus Estimate by 1.9%.

GEHC has an estimated long-term earnings growth rate of 9.1% compared with the industry’s 12% rise. The company beat earnings estimates in the trailing four quarters, the average surprise being 7.5%.

Cardinal Health, currently carrying a Zacks Rank #2, reported a second-quarter fiscal 2026 adjusted EPS of $2.63, which surpassed the Zacks Consensus Estimate by 10%. Revenues of $65.6 billion beat the Zacks Consensus Estimate by 0.9%.

CAH has an estimated long-term earnings growth rate of 15% compared with the industry’s 9.3% rise. The company’s earnings beat estimates in the trailing four quarters, the average surprise being 9.3%.