Penumbra Inc. (PEN - Free Report) has been gaining investor confidence on consistently positive results. In the past year, the company’s share price has outperformed its industry. The stock has soared 74.8% comapred with the industry’s 7.5% rise.
This global healthcare company is focused on innovative therapies and has a market cap of $5.29 billion. The company has an earnings growth rate of 20% for the next five years.
With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick for investors at the moment.
The company’s estimate revision trend for the current year has been northbound. In the past 60 days, 3 analysts have revised their estimates upward while there was no movement in the opposite direction. As a result, earnings estimates surged around 70% to 34 cents.
Let’s find out whether the recent positive trend is a sustainable one.
MWI Acquisition Looks Promising
The market is quite upbeat about Penumbra’s recently-closed acquisition of a controlling interest in MVI Health, aimed at capturing the vast potential of virtual reality application. MVI Health was originally formed in May 2017 as a joint venture between Penumbra and virtual reality software plus tracking solutions provider Sixense Enterprises. MVI Health is currently developing virtual reality technology for healthcare applications.
New Product Impressive
The company is also raising investors’ optimism with product launches. Earlier this month, Penumbra announced the launch of JET 7 and JET D Reperfusion Catheters in the United States. Notably, these reperfusion catheters have been powered by the Penumbra ENGINE aspiration source. The JET 7 and JET D along with the new ENGINE are part of the Penumbra System.
Per a report by Healthcare Market Research and Consulting Services, the global acute ischemic stroke diagnosis and treatment market is expected to see a CAGR of 5.3% between 2018 and 2023, driven by increasing incidences of strokes. In view of this, we believe, the move taken by Penumbra seems a strategic fit.
Neuro Unit Grows Strong
Over the past few quarters, Penumbra showcased consistent growth in Neuro arm, banking on a strong uptake of the Penumbra system for ischemic stroke. Last reported quarter, the company recorded 67.7% of its total revenues from the Neuro business.
Moreover, it is actively implementing marketing strategies. Further, Penumbra is growing from the extension of stroke-treatment window from 6 to 24 hours. This in turn, has led to an increase patient population, eligible for treatment.
Other Key Picks
Other top-ranked stocks in the broader medical space include Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amedisys’ expected long-term earnings growth rate is 18.6%. The stock is a Zacks #1 Ranked player at the moment.
Masimo’s expected long-term earnings growth rate is 14.8%. The stock holds a Zacks Rank #2 (Buy) at present.
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