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Wright Medical Strong Overseas, Back Order Issues Persist
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On Aug 14, we issued an updated research report on Wright Medical Group N.V. . The company’s international expansion is promising, while back order issues prevail.
The stock carries a Zacks Rank #3 (Hold).
Price Performance
Over the past year, shares of Wright Medical have declined 2.7% compared with the industry’s fall of 6.9%.
Over the last 60 days, the Zacks Consensus Estimate for the company’s next-quarter loss per share has narrowed by a penny.
Wright Medical’s international net sales are expected to grow in high single-digits on a constant currency basis, driven by continued strong biologics performance and upper extremities growth acceleration in 2018.
In the recently reported second quarter of 2018, management confirmed that the launch of AUGMENT Injectable in Australia and Canada has considerably driven growth.
Also, the company has significant presence in key emerging markets like Asia, which enhances its prospects. The overall market outlook for the global orthopedic devices market is encouraging.
In the second quarter, Wright Medical international sales rose 10% year over year.
Buoyed by a solid second-quarter show, the company raised the revenue guidance for 2018 to the band of $808-$820 million, significantly higher than the previous $800-$812 million. This represents growth of 10-12% on a constant-currency basis.
The company expects 2018 adjusted loss per share of 14-21 cents, narrower than the previous 16-23 cents.
In the second quarter, Wright Medical’s AUGMENT Injectable received PMA (Pre-Market Approval) and was fully launched. Per management, the superior handling characteristics and ease of use of AUGMENT Injectable combined with the proven clinical benefits will accelerate growth in the company’s biologics business in the second half of 2018.
Unfavorable Factors
Wright Medical’s products are usually marketed internationally through a combination of subsidiaries and distributors. In Europe, Asia, Africa and Latin America, the company primarily relies on distributors for sales. However, distribution of products in some of these markets has been troublesome due to the presence of different distributor levels. This is resulting in a significant amount of back orders.
Wright Medical relies heavily on revenues from international operations, which is adversely affected by fluctuations in foreign currency exchange rates. A strengthening U.S. dollar is likely to hurt the company’s results in the near term.
Inogen’s long-term earnings growth rate is projected at 24.5%. The stock carries a Zacks Rank #2.
Masimo’s expected long-term earnings growth rate is 14.8%. The stock currently has a Zacks Rank #2.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Wright Medical Strong Overseas, Back Order Issues Persist
On Aug 14, we issued an updated research report on Wright Medical Group N.V. . The company’s international expansion is promising, while back order issues prevail.
The stock carries a Zacks Rank #3 (Hold).
Price Performance
Over the past year, shares of Wright Medical have declined 2.7% compared with the industry’s fall of 6.9%.
Over the last 60 days, the Zacks Consensus Estimate for the company’s next-quarter loss per share has narrowed by a penny.
Wright Medical Group N.V. Price and Consensus
Wright Medical Group N.V. Price and Consensus | Wright Medical Group N.V. Quote
What’s Favoring the Stock?
Wright Medical’s international net sales are expected to grow in high single-digits on a constant currency basis, driven by continued strong biologics performance and upper extremities growth acceleration in 2018.
In the recently reported second quarter of 2018, management confirmed that the launch of AUGMENT Injectable in Australia and Canada has considerably driven growth.
Also, the company has significant presence in key emerging markets like Asia, which enhances its prospects. The overall market outlook for the global orthopedic devices market is encouraging.
In the second quarter, Wright Medical international sales rose 10% year over year.
Buoyed by a solid second-quarter show, the company raised the revenue guidance for 2018 to the band of $808-$820 million, significantly higher than the previous $800-$812 million. This represents growth of 10-12% on a constant-currency basis.
The company expects 2018 adjusted loss per share of 14-21 cents, narrower than the previous 16-23 cents.
In the second quarter, Wright Medical’s AUGMENT Injectable received PMA (Pre-Market Approval) and was fully launched. Per management, the superior handling characteristics and ease of use of AUGMENT Injectable combined with the proven clinical benefits will accelerate growth in the company’s biologics business in the second half of 2018.
Unfavorable Factors
Wright Medical’s products are usually marketed internationally through a combination of subsidiaries and distributors. In Europe, Asia, Africa and Latin America, the company primarily relies on distributors for sales. However, distribution of products in some of these markets has been troublesome due to the presence of different distributor levels. This is resulting in a significant amount of back orders.
Wright Medical relies heavily on revenues from international operations, which is adversely affected by fluctuations in foreign currency exchange rates. A strengthening U.S. dollar is likely to hurt the company’s results in the near term.
Key Picks
A few better-ranked stocks from broader medical space are Intuitive Surgical (ISRG - Free Report) , Masimo Corporation (MASI - Free Report) and Inogen, Inc. (INGN - Free Report) .
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inogen’s long-term earnings growth rate is projected at 24.5%. The stock carries a Zacks Rank #2.
Masimo’s expected long-term earnings growth rate is 14.8%. The stock currently has a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>