Merit Medical Systems, Inc. (MMSI Quick QuoteMMSI - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by a solid product performance and its continued spending on research and development, is expected to contribute further. However, tariffs and trade policy headwinds, and China macro pressure persist.

This Zacks Rank #3 (Hold) company’s shares have declined 26.9% in the year-to-date period compared with the industry’s 6.5% drop. However, the S&P 500 has risen 8.1% during the same time frame.

The renowned medical device provider has a market capitalization of $3.85 billion. The company projects 8.9% growth for the next five years and expects to maintain its strong performance going forward. It delivered an average earnings surprise of 12.5% for the past four quarters.

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Let’s delve deeper.

MMSI’s Growth Drivers

Strength in Therapeutic Products and Core Platforms: Merit Medical delivered first-quarter 2026 constant-currency revenue growth above management’s expectations, supported by strong performance across its therapeutic product portfolio. Therapeutic product sales increased 7% year over year, driven by robust growth in cardiac therapies and endoscopy, along with solid contributions from vascular intervention and oncology products.

The company’s therapeutic business continues to be an important growth engine, representing roughly one-third of total revenues while growing faster than foundational products. Management highlighted that therapeutic products have delivered an 11% organic compound annual growth rate over the past three years, reflecting increasing physician adoption of products focused on disease treatment and intervention.

Oncology Expansion Through View Point Medical Acquisition: A major strategic development during the first quarter was Merit Medical’s acquisition of View Point Medical. The transaction expands the company’s oncology platform and strengthens its position in breast cancer localization procedures.

View Point Medical’s OneMark Detection Imaging System and tissue markers complement Merit Medical’s existing SCOUT platform. Management believes the acquisition expands the company’s addressable oncology procedure opportunity, targeting an estimated 1.3 million additional biopsy-related procedures annually in the United States.

The company expects the acquisition to contribute between $2 million and $4 million in revenues during 2026 and projects long-term annual sales growth of at least 20% for the OneMark platform.

Product Innovation Supporting Growth: Merit Medical continued to invest in product innovation across its therapeutic platforms. During the first quarter, the company commercially launched the Resilience Through-the-Scope Esophageal Stent, indicated for the treatment of esophageal fistulas and strictures caused by malignant tumors, in the United States. Management views the product as a differentiated offering that can support future growth.

The endoscopy business also benefited from the integration of the C2 CryoBalloon acquisition, which exceeded expectations during the quarter. Combined with the Resilience launch, these initiatives position the platform for continued growth.

Key Challenges for MMSI Stock

Tariff-Related Cost Pressures: Despite strong operational execution, tariffs continue to pressure profitability. During the first quarter of 2026, tariffs reduced gross margin by 120 basis points and created a $4.6 million financial impact. While Merit Medical mitigated much of this pressure through pricing discipline, product mix improvements and operational efficiencies, management expects tariffs to remain a significant challenge throughout 2026.

Current guidance assumes a full-year tariff impact of approximately $15 million, or 19 cents per share, compared with a $9 million impact recorded during the final eight months of 2025. Although the company has begun seeking reimbursement for certain tariff payments, the outcome remains uncertain.

OEM Weakness & China Macro Pressure: The company’s OEM segment remained a drag on overall growth during the first-quarter 2026. OEM revenues declined 14% year over year due to inventory destocking by certain U.S. customers and continued demand softness in the Asia-Pacific region. Management characterized the weakness as largely temporary and timing-related rather than a loss of market share.

China also remains a challenging market due to the impact of volume-based procurement programs, which continue to pressure pricing across medical device categories. Although first-quarter performance in China was modestly better than expected, management continues to forecast only low-single-digit growth from the region in 2026.

Competitive Pressure Across Multiple Markets: Merit Medical faces competition from both large medical device companies and specialized niche players across its product portfolio. As the company expands through acquisitions and new product launches, it must continue driving innovation, maintaining market share and managing pricing pressures. Increased competition or slower integration of acquired businesses could create challenges for future growth and margin expansion.

Merit Medical Systems, Inc. Price

Merit Medical Systems, Inc. price | Merit Medical Systems, Inc. Quote

Estimate Trend

MMSI is witnessing a positive estimate revision trend for 2026. In the past 30 days, the Zacks Consensus Estimate for earnings per share (EPS) has moved 0.2% north to $4.07.

The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is pegged at $404.7 million, suggesting a 6.81% rise from the year-ago reported number. The consensus mark for EPS is pegged at 96 cents, implying a 4.9% decline from the prior-year reported figure.

Stocks to Consider

Some better-ranked stocks from the broader medical space are West Pharmaceutical (WST Quick QuoteWST - Free Report) , Globus Medical (GMED Quick QuoteGMED - Free Report) and Biodesix (BDSX Quick QuoteBDSX - Free Report) .

West Pharmaceutical, currently sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term earnings growth rate of 13.9%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

West Pharmaceutical’s shares have gained 14.3% against the industry’s 6.5% decline in the year-to-date period.

Globus Medical, currently sporting a Zacks Rank #1, has an estimated long-term earnings growth rate of 10.2%. GMED’s earnings beat estimates in each of the trailing four quarters, the average surprise being 26.3%.

Globus Medical’s shares have lost 8.4% compared with the industry’s 15.8% decline in the year-to-date period.

Biodesix, currently carrying a Zacks Rank of 2 (Buy), has an estimated earnings growth rate of 36% for 2026. The company beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 25.5%.

Biodesix’s shares have jumped 127.4% against the industry’s 8.1% decline in the year-to-date period.