On Mar 19, 2015, Zacks Investment Research raised LeMaitre Vascular Inc. LMAT to a Zacks Rank #1 (Strong Buy). The bullish view resulted from impressive fourth-quarter 2014 results and the subsequent estimate revision.
Why the Upgrade?
LeMaitre reported EPS of 11 cents per share, which beat the Zacks Consensus Estimate by 4 cents and increased 120% from the year-ago quarter. The year-over-year upside was driven by a 4.3% increase in net sales, which totaled $19 million, in line with the Zacks Consensus Estimate.
LeMaitre’s recently launched HYDRO Valvulotome gained significant traction during the quarter. HYDRO represented 54% of all Valvulotome dollar sales (23% of sales) in the fourth quarter, which grew 7.4% on a constant currency basis. The company currently has 50% to 60% market share in Valvulotomes, which is expected to expand with the launch of HYDRO.
LeMaitre’s Omniflow II biologic graft also performed better than management’s expectations in the quarter. This product line, acquired in Aug, 2014, gives the company significant exposure to a $30 million niche market, with limited competition.
Management forecasts first-quarter 2015 sales of $17.8 million, up almost 6% on a year-over-year basis. Foreign currency exchange volatility is expected to hurt sales by approximately 6%. The company expects operating income of $1.4 million (8% operating margin).
LeMaitre expects 2015 sales of $74.5 million, an increase of 5% on a year-over-year basis. The company expects operating income to increase by 19% to $7.5 million (10% operating margin). Management estimates that the strong dollar will hurt sales by approximately $3.7 million, reduce gross margin by 100 basis points and hurt operating income by approximately $1.8 million.
We believe that the expanding product portfolio that includes Xenosure, Omniflow and HYDRO will drive overall results in 2015.
Estimate Revisions
The Zacks Consensus Estimate for fiscal 2015 is currently pegged at 27 cents per share, which moved up by a couple of cents over the last 30 days. Over the same time frame, the Zacks Consensus Estimate for 2016 has been revised upward by a penny to stand at the present 33 cents per share.
Other Stocks to Consider
One may also consider favorably-ranked stocks like Inogen INGN, Abaxis ABAX and Phibro Animal Health Corp PAHC. All the stocks carry the same Zacks Rank as LeMaitre.
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