NuVasive, Inc. NUVA has been gaining from several sales-building efforts (including product launches), stable sales force and robust segmental growth. The company has also been enhancing focus on international markets. Further, its orthopedic business continues to enjoy a competitive advantage globally on innovative technologies.
Over the past year, shares of the Zacks Rank #2 (Buy) stock have outperformed its industry. The stock has gained 56.6% compared with 16.8% growth of its industry. Also, the company has outperformed the S&P 500’s 27.9% rally during the same period.
The renowned medical device provider, which specializes in developing minimally-disruptive surgical products and procedurally-integrated solutions for spine, has a market capitalization of $4 billion. The company projects 12.9% growth for the next five years and expects to maintain its strong segmental performance. Further, it delivered a positive earnings surprise of 15.1%, on average, over the trailing four quarters.
With solid prospects, the stock is an attractive pick for investors at the moment.
Per our Style Score, NuVasive has a Growth Score of B, which is reflective of its solid prospects. Our research shows that stocks with the combination of a Growth Style Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Factors That Make the Stock an Attractive Pick
Q3 Results: We are upbeat about NuVasive’s third-quarter performance. The company’s quarterly performance was robust, with better-than-expected revenues. Both of its segments witnessed year-over-year improvements in revenues. The EMEA region witnessed a solid uptick, driven by substantial contributions from the U.K. and Spain.
Product Launches: We are particularly upbeat about NuVasive’s slew of recent product launches within the spine business, which includes Modulus XLIF and Modulus Cervical. Within the Advanced Materials Science (AMS) portfolio, the company launched Modulus TLIF-A and Modulus TLIF-O porous titanium spine implants, designed for the transforaminal lumbar interbody fusion (TLIF) procedure. It also introduced the X360 system, integrated with Pulse, for lateral single-position surgery.
The company received the FDA 510(k) clearance for expanded indications for the CoRoent Small Interlock system.
International Business: We are optimistic about NuVasive's robust international growth potential. In the last reported quarter, the company registered 13.4% international revenue growth at CER. The EMEA region witnessed a solid uptick, driven by substantial contributions from the U.K. and Spain. In the Asia Pacific, Japan delivered sturdy top-line growth despite several near-term challenges. The company expects the momentum to continue in the fourth quarter as well.
NuVasive is witnessing a positive estimate revision trend for the current year. Over the past 60 days, the Zacks Consensus Estimate for its earnings has moved 2.2% north to $2.37.
The Zacks Consensus Estimate for the company’s 2019 revenues is pegged at $1.16 billion, suggesting 5.6% rise from the year-ago reported number.
Other Key Picks
Some other top-ranked stocks from the broader medical space are Haemonetics Corporation HAE, National Vision Holdings, Inc EYE and Medtronic plc MDT.
Haemonetics, currently carrying a Zacks Rank #2, has a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
National Vision’s long-term earnings growth rate is estimated at 17.8%. The company currently carries a Zacks Rank #2.
Medtronic’s long-term earnings growth rate is estimated at 7.4%. It currently carries a Zacks Rank #2.
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