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Here's Why You Should Retain Haemonetics in Your Portfolio Now
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Haemonetics Corporation (HAE - Free Report) is progressing well with its growth strategies like the expansion of the product portfolio within its plasma and Hemostasis Management franchise. However, economic uncertainty and tough competition are likely to offset the positives to some extent.
The leader of blood management solutions’, with a market capitalization of $6.08 billion, earnings growth is estimated to be 13.5% over the next five years. Also, the company has a trailing-four quarter positive earnings surprise of 21%, on average.
Over the past year, the stock has outperformed its industry. The stock rallied 37.5% compared with the industry’s 10.5% rise.
Let’s delve deeper into other factors that substantiate its Zacks Rank #3 (Hold).
Potential of Plasma: Haemonetics has been witnessing strong growth in the Plasma franchise for quite some time. In the fiscal third quarter, the largest business segment of the company witnessed 6.9% improvement on strong growth within North America, driven by the underlying demand for plasma-based medicines, software upgrades and competitive conversions.
The company continued to benefit from the NexSys device and NexLynk donor management software (DMS), backed by increased customer adoptions. Haemonetics is optimistic about the prospects of its Plasma business and projects 13-15% segmental growth for fiscal 2020.
Potential of Hemostasis Management: Under the Hospital business, Hemostasis Management has witnessed strong growth over the recent past. The Hospital business witnessed 6.4% growth in the third quarter, wherein organic revenue growth for the Hemostasis Management product line was 19.8%.
The TEG Hemostasis Analyzer system continues to be the growth driver for the company, registering 20% improvement in the third quarter on improved utilization, market share gains and product launches such as the TEG 6s PlateletMapping cartridge and the U.S. trauma indication. These factors are expected to continue driving growth for the company’s Hospital business.
Upbeat Guidance: Haemonetics expects revenue growth of 3-5% for fiscal 2020. The company also anticipates yearly organic revenue growth at 6-8%. Further, it raised its 2020 adjusted earnings per share guidance. This indicates the continuation of its bullish trend through the rest of fiscal 2020.
However, there are a few downsides marring growth prospects of the company.
Economic Uncertainty: The uncertain economic scenario continues to pose a challenge for Haemonetics. The company has been progressing with blood management solutions even though the attempt is negatively impacted by economic challenges. Moreover, a stronger dollar, causing significant currency fluctuations, has been affecting its outcome over the past few quarters and no respite is expected in the near term.
Competitive Landscape: Haemonetics operates in a very competitive environment, for both manual and automated systems, which includes companies like MAK Systems, Medtronic, Fresenius, MacoPharma and Terumo. Slower-than-expected product adoption by customers, especially the American Red Cross, might reduce Haemonetics’ revenues and profit.
Estimate Trend
The company is witnessing a positive estimate revision trend for 2020. Over the past 30 days, the Zacks Consensus Estimate for its earnings has inched up 1.4% to 75 cents per share.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2020 revenues is pegged at $249.2 million, suggesting 0.04% fall from the year-ago reported number.
Hill-Rom has a projected long-term earnings growth rate of 11.1%.
Stryker has an expected long-term earnings growth rate of 9.9%.
ResMed has a long-term earnings growth rate of 11.9%.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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Here's Why You Should Retain Haemonetics in Your Portfolio Now
Haemonetics Corporation (HAE - Free Report) is progressing well with its growth strategies like the expansion of the product portfolio within its plasma and Hemostasis Management franchise. However, economic uncertainty and tough competition are likely to offset the positives to some extent.
The leader of blood management solutions’, with a market capitalization of $6.08 billion, earnings growth is estimated to be 13.5% over the next five years. Also, the company has a trailing-four quarter positive earnings surprise of 21%, on average.
Over the past year, the stock has outperformed its industry. The stock rallied 37.5% compared with the industry’s 10.5% rise.
Let’s delve deeper into other factors that substantiate its Zacks Rank #3 (Hold).
Potential of Plasma: Haemonetics has been witnessing strong growth in the Plasma franchise for quite some time. In the fiscal third quarter, the largest business segment of the company witnessed 6.9% improvement on strong growth within North America, driven by the underlying demand for plasma-based medicines, software upgrades and competitive conversions.
The company continued to benefit from the NexSys device and NexLynk donor management software (DMS), backed by increased customer adoptions. Haemonetics is optimistic about the prospects of its Plasma business and projects 13-15% segmental growth for fiscal 2020.
Potential of Hemostasis Management: Under the Hospital business, Hemostasis Management has witnessed strong growth over the recent past. The Hospital business witnessed 6.4% growth in the third quarter, wherein organic revenue growth for the Hemostasis Management product line was 19.8%.
The TEG Hemostasis Analyzer system continues to be the growth driver for the company, registering 20% improvement in the third quarter on improved utilization, market share gains and product launches such as the TEG 6s PlateletMapping cartridge and the U.S. trauma indication. These factors are expected to continue driving growth for the company’s Hospital business.
Upbeat Guidance: Haemonetics expects revenue growth of 3-5% for fiscal 2020. The company also anticipates yearly organic revenue growth at 6-8%. Further, it raised its 2020 adjusted earnings per share guidance. This indicates the continuation of its bullish trend through the rest of fiscal 2020.
However, there are a few downsides marring growth prospects of the company.
Economic Uncertainty: The uncertain economic scenario continues to pose a challenge for Haemonetics. The company has been progressing with blood management solutions even though the attempt is negatively impacted by economic challenges. Moreover, a stronger dollar, causing significant currency fluctuations, has been affecting its outcome over the past few quarters and no respite is expected in the near term.
Competitive Landscape: Haemonetics operates in a very competitive environment, for both manual and automated systems, which includes companies like MAK Systems, Medtronic, Fresenius, MacoPharma and Terumo. Slower-than-expected product adoption by customers, especially the American Red Cross, might reduce Haemonetics’ revenues and profit.
Estimate Trend
The company is witnessing a positive estimate revision trend for 2020. Over the past 30 days, the Zacks Consensus Estimate for its earnings has inched up 1.4% to 75 cents per share.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2020 revenues is pegged at $249.2 million, suggesting 0.04% fall from the year-ago reported number.
Stocks Worth a Look
A few better-ranked stocks from the broader medical space are Hill-Rom , Stryker (SYK - Free Report) and ResMed (RMD - Free Report) . While ResMed currently sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hill-Rom has a projected long-term earnings growth rate of 11.1%.
Stryker has an expected long-term earnings growth rate of 9.9%.
ResMed has a long-term earnings growth rate of 11.9%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>