Surmodics, Inc. (SRDX - Free Report) is one of the top-performing stocks in the MedTech space. Solid fiscal fourth-quarter show and lucrative In Vitro Diagnostics (IVD) unit prospects favor the stock.
In a year’s time, shares of this Zacks Rank #2 (Buy) company have rallied 83.1% compared with the industry's 2.3% rise and the S&P 500 index’s 3.7% gain.
Let us take a quick look at the factors that make Surmodics a solid pick for now.
What Makes Surmodics an Attractive Pick?
Solid Q4 Results
Surmodics exited the fiscal 2018 on a solid note.
Notably, the company posted adjusted earnings of 5 cents per share in fourth-quarter fiscal 2018, comparing favorably with the Zacks Consensus Estimate of a loss of a penny. It is encouraging to note that Surmodics expects fiscal 2019 revenues between $92 million and $97 million.
Revenues in the quarter increased 14.9% to $23 million, which beat the Zacks Consensus Estimate by 2.2%.
The company continues to gain from its core Medical Device and IVD units.
IVD Drives Growth
Surmodics’ performance continues to be driven by its IVD unit. For over 35 years, the segment has been a leader in developing an ELISA/EIA, immunoblot/western blot, line assay or microarray.
In the fourth quarter of fiscal 2018, sales at IVD increased 13.4% to $6.1 million. Per management, the segment saw strong growth in antigen and DNA slide sales in the quarter.
Which Way Are Estimates Headed?
For the first quarter of fiscal 2019, the Zacks Consensus Estimate is pegged at a loss of a penny, reflecting a year-over-year decline of 110%. The same for revenues stands at $18.9 million, mirroring an 11.1% improvement year over year.
For fiscal 2019, the Zacks Consensus Estimate for earnings is pinned at 8 cents, mirroring an 83.7% decline from the year-earlier number. For revenues, the same is pegged at $93.3 million, indicating a 14.8% rise.
Surmodics has a Momentum Score of B. This reflects possibilities of outperformance at the moment. Our research shows that stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 are better picks than most.
Other Key Picks
Other top-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , OPKO Health, Inc. (OPK - Free Report) and Veeva Systems (VEEV - Free Report) .
Integer Holdings has an earnings growth rate of 31.2% for the next quarter and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
OPKO Health’s long-term earnings growth rate is projected at 12%. The stock carries a Zacks Rank of 2.
Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock carries a Zacks Rank #2.
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