Shares of Natus Medical Inc. (BABY) rallied to a 52-week high of $43.61 on Jun 24 and closed a tad bit lower at $43.26. This represents a strong one-year return of approximately 75%, better than the S&P 500’s return of 7.7% over the same period.
Natus Medical’s first-quarter earnings of 31 cents per share comfortably beat the Zacks Consensus Estimate by a couple of cents. On an average, the company has outperformed the Zacks Consensus Estimate by approximately 6.58% over the last four quarters.
This Zacks Rank #3 (Hold) stock has a market cap of $1.43 billion and a long-term expected EPS growth rate of 18.50%.
Growth Catalysts
We are impressed with Natus Medical’s product launches and product pipeline strength. The new Vista EMG Ultrasound product, Hearing Screening Service business (Peloton), Global Neuro-Diagnostics (GND) and NicView will continue to drive revenues in the near term.
Moreover, the company is expected to introduce innovative products over the next 18 months in both the newborn care and neurology platforms. Additionally, the five-year $32.5 million contract from the state of California to provide hearing screening coordination services will further drive top-line growth over the long run.
Based on the product line strength, Natus Medical raised its non-GAAP earnings guidance for full-year 2015, which is now expected in the band of $1.47 to $1.51 (up from $1.42 to $1.46). Revenue guidance was also raised to a range of $376 million to $378 million from $373 million to $275 million.
Estimate Revisions
The Zacks Consensus Estimate for 2015 and 2016 has remained steady at $1.49 and $1.69, respectively, over the last 30 days.
Stocks to Consider
Better-ranked stocks in the industry are Masimo MASI, Cepheid CPHD and Globus Medical GMED. While Masimo and Cepheid sport a Zacks Rank #1 (Strong Buy), Globus Medical holds a Zacks Rank #2 (Buy).
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