3 Reasons to Add Integer Holdings (ITGR) Stock to Your Portfolio
Integer Holdings Corporation ITGR has been gaining from its research and product development activities. The optimism led by a solid second-quarter 2023 performance and its solid foothold in the broader MedTech space are expected to contribute further. However, dependence on third-party suppliers and global climate change-related concerns continue to bother the company.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 34.2% against the 0.8% decline of the industry it belongs to. The S&P 500 has witnessed 18% growth in the said time frame.
The renowned medical device outsource manufacturer has a market capitalization of $2.53 billion. The company projects 12.1% growth for the next five years and expects to maintain its strong performance. Integer Holdings surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 8.4%, on average.
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Let’s delve deeper.
Research and Product Development: We are optimistic about Integer Holdings’ position as a developer and manufacturer of medical devices and components. The company focuses on developing new products, improving and enhancing existing products and expanding the use of its products in new or tangential applications. In addition to ITGR’s internal technology and capability development efforts aimed at providing its customers with differentiated solutions, the company also engages outside research institutions for unique technology projects.
Solid Foothold in the Broader MedTech Space: We are optimistic about Integer Holdings’ stable footing in the cardiac, neuromodulation, orthopedics, vascular and advanced surgical markets. Its primary customers include large, multi-national original equipment manufacturers and their affiliated subsidiaries.
ITGR has been focusing on its sales efforts to increase its market penetration in the Cardio & Vascular, Neuromodulation and Non-Medical Electrochem markets. The company is also making strategic initiatives to maintain its leadership position in the cardiac rhythm management market.
Strong Q2 Results: Integer Holdings’ robust second-quarter 2023 results raise our optimism. The company registered strong year-over-year top-line and bottom-line performances. Robust results by both segments and strength in all three product lines of the Medical Sales segment were recorded. The expansion of the adjusted operating margin was also seen.
Downsides
Global Climate Change: Customer, investor and employee expectations relating to environmental, social and governance (ESG) have been rapidly evolving and increasing. In addition, government organizations are enhancing or advancing legal and regulatory requirements specific to ESG matters. The heightened stakeholder focus on ESG issues related to ITGR’s business requires the continuous monitoring of various and evolving laws, regulations, standards and expectations and the associated reporting requirements. A failure to adequately meet stakeholder expectations may result in non-compliance, loss of business and reduced demand for Integer Holdings’ stock, among others.
Dependence on Third-Party Suppliers: Integer Holdings’ business depends on a continuous supply of raw materials, which may be susceptible to fluctuations due to transportation issues, government regulations and price controls, among others. Significant increases in the cost of raw materials, which cannot be recovered through increases in the prices of the company’s products, could adversely affect its operating results.
Estimate Trend
Integer Holdings is witnessing a positive estimate revision trend for 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.3% north to $4.33 per share.
The Zacks Consensus Estimate for the company’s third-quarter 2023 revenues is pegged at $372.3 million, suggesting an 8.6% rise from the year-ago quarter’s reported number.
Other Key Picks
A few other top-ranked stocks in the broader medical space are Cardinal Health, Inc. CAH, HealthEquity, Inc. HQY and McKesson Corporation MCK.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 14.3%. CAH’s earnings surpassed estimates in all the trailing four quarters, with an average surprise of 16%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has gained 31.1% compared with the industry’s 19.3% rise over the past year.
HealthEquity, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 23.5%. HQY’s earnings surpassed estimates in all the trailing four quarters, with an average of 13%.
HealthEquity has gained 3.9% against the industry’s 8.4% decline over the past year.
McKesson, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 10.7%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 8.1%.
McKesson has gained 26.2% compared with the industry’s 19.3% rise over the past year.
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Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
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Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
