On Feb 27, we issued an updated research report on Integra LifeSciences Holdings Corporation IART. The company has been noticing certain major developments overseas. However, a tough competitive landscape is concerning.
This New Jersey-based company is a leading developer, manufacturer and marketer of surgical implants and medical instruments for use in neurosurgery, extremity reconstruction, orthopedics and general surgery. Shares of the company have outperformed the S&P 500 index over the past year. While the stock has gained 6.3%, the index has risen 4.3%.
Integra exited the fourth quarter of 2018 on a solid note with better-than-expected numbers. Last year marked the fifth consecutive year of double-digit revenues and EPS growth. The company’s progress with its channel expansion strategy and Codman integration buoys optimism.
Benefitting from product launches and an enhanced sales force performance, the company expects faster organic growth during the second half of 2019. Notably, it is successfully executing its plans within Orthopedics and Tissue Technologies segment to broaden sales channel, improve focus and competitiveness and better align the company’s product portfolio with clinical customers.
In this segment, the company has realigned 100% of in-patient wound reconstruction and orthopedic territories as part of its channel extension strategy. In the second half of 2018, the company saw a positive response in the sales performance of regenerative technologies franchises.
Moreover, heavy investments in research and development were encouraging. The company has also entered into several partnerships including a program with Healogics wherein Integra is a primary provider of cellular and tissue-based products for the treatment of acute and chronic wounds.
Meanwhile, Integra faces severe competition in the surgical implants and medical instruments market. The company needs continuous innovation to fend off rivalry. Moreover, consolidations in the industry could induce intense pricing pressure.
Zacks Rank & Key Picks
Currently, Integra has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are ABIOMED, Inc., ABMD, Penumbra, Inc., PEN and Masimo, Inc. MASI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ABIOMED’s long-term earnings growth rate is expected to be 27.67%.
Penumbra’s long-term earnings growth rate is projected to be 20%.
Masimo’s long-term earnings are predicted to grow 15.6%.
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