Merit Medical Systems, Inc. MMSI is a name to reckon with in the current MedTech space as a top-performing stock. Improvement in price performance and strong fundamentals reflect its bullish run. Therefore, the clear message for investors is that if they haven’t yet taken advantage of the stock’s share price appreciation, it’s time they add it to their portfolio for good returns.
The company’s impressive performance in 2017 accounts for its potential to carry the momentum forward in the imminent period. A long-term expected earnings growth rate of 11.6% also holds great promise for the stock in this regard.
Why an Attractive Pick?
Share Price Appreciation
A glimpse of the company’s price trend reveals that the stock has had an encouraging trip on the bourse year to date. Merit Medical returned a whopping 62.3%, comparing favorably with the S&P 500 index’s rally of 19.9%. The metric also betters the industry’s gain of 21.5%.
Merit Medical Systems, Inc. Price and Consensus
Northbound Estimate Revisions
The stock has seen the Zacks Consensus Estimate for current-year earnings being revised upward by four analysts, over the past 60 days. Thus absence of any single southbound revision highlights analysts’ optimism in the company as well as boosts a positive sentiment around the stock. During the same time frame, the consensus mark for adjusted earnings has remained stable at $1.27 per share. For 2018, the Zacks Consensus Estimate for earnings has been raised 3.5% in the last couple of months to $1.47.
The company sports a Zacks Rank #1 (Strong Buy), indicating robust fundamentals and expectations of outperformance in the near term.
Strong Growth Prospects
The company’s earnings estimate for 2017 reflects year-over-year growth of 25.7%. Moreover, the bottom line is expected to register a 16% rise in 2018 on a year-over-year basis.
The consensus mark of $724.6 million for 2017 revenues represents a year-over-year improvement of 20%. Moreover, the top line is anticipated to witness a 12% increase next year.
The company is likely to gain from its decision to purchase certain assets from Becton, Dickinson and Company BDX including soft tissue core needle biopsy products. It will also acquire the Aspira Pleural Effusion Drainage Kits and the Aspira Peritoneal Drainage System from C. R. Bard BCR. All these integrations might help expand its footprint.
Acquisitions to Drive Growth
Merit Medical has been leveraging on bolt-on buyouts to drive inorganic growth. The company recently acquired a small US-based entity, Laurane Medical with manufacturing operations in Europe. The purchased company specializes in the bone biopsy business. Management at Merit Medical expects accretive returns from this deal with Laurane Medical by the first quarter of 2018.
In fact, Merit Medical also bought the Australian Custom Pack business unit, which forms part of the ITL Health Group, for $14.4 million in October. This takeover is projected to fortify the company’s footprint down under.
Other Key Pick
Another top-ranked stock in the broader medical sector is PetMed Express PETS, flaunting the same bullish Zacks Rank of 1 as Merit Medical. The company has a long-term expected earnings growth rate of 10%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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