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Hill-Rom (HRC) Rides on International Growth, New Launches

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Recently, we issued an updated research report on Hill-Rom Holdings, Inc. HRC. The company is witnessing a solid uptick in domestic revenues, driven by a sturdy performance in Patient Support Systems and Front-Line Care. The stock carries a Zacks Rank #3 (Hold).

Shares of Hill-Rom have outperformed the broader industry in the past six months. The stock has increased 6.3% compared with the industry's 2.9% growth.

Notably, Hill-Rom exited fiscal 2019 on a strong note with better-than-expected fourth-quarter results. Core revenue growth was 8%, marking the 6th consecutive quarter of increase in mid-single digits or higher. The company saw a solid year-over-year increase in revenues on robust domestic growth, driven by sturdy performances in Patient Support Systems.


Internationally, Asia Pacific, Latin America and EMEA registered strong revenue growth. Hill-Rom is looking forward to its recent acquisitions of Breathe Technologies and Voalte that are excellent examples of strategic deployment of capital to advance leadership in higher growth, higher margin categories while adhering to rigorous strategic and financial criteria to generate attractive returns.

Contribution from new products has been a significant driver of the top line during 2019, adding approximately 300 basis points of growth. New products launched in 2019 include RetinaVue 700 Imager, EarlySense and WatchCare. With several other new products in the pipeline, the company expects to register durable growth in the upcoming period.

However, sales in Surgical Solutions dropped significantly. Issues like domestic and global economic headwinds, unfavorable foreign exchange and competitive lands are concerning.

Key Picks

Some better-ranked stocks from the broader medical space are CONMED Corp. CNMD, HealthEquity (HQY - Free Report) and West Pharmaceutical Services WST, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conmed has a long-term earnings growth rate of 17%.

HealthEquity has a long-term earnings growth rate of 25%.

West Pharmaceuticals has a long-term earnings growth rate of 14%.

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