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Here's Why You Should Buy Wright Medical (WMGI) Stock Now

Zacks Equity Research

Wright Medical Group N.V. WMGI has been enjoying a favorable place in the investors’ book, courtesy of its continued developments. In a year’s time, the stock has outperformed its industry. Shares of the company have surged 51.5% compared with the industry and S&P 500’s growth of 11.1% and 2.1%, respectively.

Notably, a growing orthopedic market, launch of new products like PERFORM Reversed glenoid, ORTHOLOC 3Di and the SIMPLICITI shoulder system are likely to drive the company’s top line in the quarters ahead.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.

International Expansion

Wright Medical’s international net sales are expected to grow in the high single-digits on a constant-currency basis driven by continued strong performance in biologics. Further, solid improvement at upper extremities growth unit instils optimism. Meanwhile, the company’s shoulder portfolio is gaining momentum in international markets, particularly with the launch of PERFORM Reversed.

In 2019, it intends to put more PERFORM Reversed into international market. Earlier in 2018, management confirmed that the launch of AUGMENT Injectable in Australia and Canada has considerably driven growth.

In the third quarter of 2018, international sales grew 13% on a year-over-year basis.

Strong Foothold in the Foot & Ankle Market

Wright Medical’s solid foot and ankle products portfolio, and extensive training provided to extremities-dedicated surgeons have enabled it to emerge as a leading player in the foot and ankle market.

Furthermore, ORTHOLOC ankle and small bone fracture product launches has been impressive. Management is also upbeat about the third-quarter launch of the Minimally Invasive Surgery System and AUGMENT Injectable, which is likely to provide further momentum to the U.S. lower extremity business.

In the third quarter of 2018, Wright Medical’s Lower Extremities business posted worldwide revenues of $71.1 million, up 8.8% year over year. While revenues in the United States increased 12% to $57.6 million on a year-over-year basis, international sales totaled $13.5 million, down 3.3% year over year.

Which Way Are Estimates Trending?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 6 cents, reflecting year-over-year decline of 40%. The same for revenues stands at $237.4 million, mirroring a 9.1% improvement year over year.

For 2018, the Zacks Consensus Estimate is pinned at a loss of 7 cents. The same for revenues is pegged at $836 million.

Wright Medical Group N.V. Price and Consensus


Wright Medical Group N.V. Price and Consensus | Wright Medical Group N.V. Quote

Key Picks

A few top-ranked stocks in the broader medical space are Surmodics, Inc SRDX, Abbott Laboratories ABT and Cardiovascular Systems, Inc. CSII.

Surmodics has a long-term expected earnings growth rate of 10%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Abbott’s long-term earnings growth rate is projected at 11.7%. The stock carries a Zacks Rank #2.

Cardiovascular Systems exceeded the Zacks Consensus Estimate in the trailing four quarters, the average beat being 77.1%. The stock sports a Zacks Rank of 1.

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