Merit Medical Hits 52-Week High on Solid Q1 & Product Suite - Analyst Blog
Shares of Merit Medical Systems Inc. MMSI rallied to a new 52-week high of $21.75 in mid-day trading on Jun 17. The company’s shares eventually closed at $21.57 on the day, translating into an impressive one-year return of around 47% and a year-to-date return of roughly 24%.
The bullish run reflects the company’s impressive first-quarter 2015 results as well as a healthy and promising product pipeline.
This Zacks Rank #2 (Buy) stock has a market cap of around $950 million while average volume of shares traded over the last three months is roughly 0.3 million.
Growth Catalysts
Merit Medical’s first-quarter earnings and revenues crushed their respective Zacks Consensus Estimate. Adjusted EPS surged nearly 50% on a year-over-year basis on the back of robust sales growth as well as operating margin expansion.
The quarter witnessed a decent increase in sales of Endotek, custom kit and tray, BioSphere, inflation devices and stand-alone devices, all of which drove a 9% increase in net sales.
Merit Medical is looking to roll out its new product – Prelude Snap – by next month. The product has won both the CE mark and FDA approval and is expected to be a significant addition to Merit Medical’s vascular access product portfolio. Management is also set to unveil the Corvocet Biopsy system this year, which has already received positive trial reviews from physicians.
We believe that this will enhance Merit Medical’s existing product portfolio and help it gain an edge in the competitive medical devices market. The product launches are also expected to boost top-line growth for the company.
Merit Medical is also on schedule to open its new facility in Mexico, with production expected to begin in the third quarter of 2015. In addition, the company has completed its logistics and customer service facilities in the Netherlands, which is expected to drive growth in Europe, the Middle East and Asia.
We are also upbeat on Merit Medical’s robust sales force in the U.S., which increased by 9.2% during the first quarter of 2015. Growth in international markets, especially China, continues to be a strong point for the company.
Other Stocks to Consider
Other favorably-ranked stocks in the medical dental supply industry are AmerisourceBergen Corp ABC, Laboratory Corp. of America Holdings LH and Luxottica Group SpA LUX. All the three stocks carry a Zacks Rank #2.
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