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Here's Why You Should Consider Betting On CONMED Stock Now

Zacks Equity Research

CONMED Corporation CNMD is well poised for growth on broad product portfolio, strong international sales and solid gains from its core units — Orthopedic Surgery and General Surgery.

The stock currently sports a Zacks Rank #1 (Strong Buy).

Price Performance

Shares of CONMED have gained 26.8%, outperforming the industry’s growth of 13.3% on a year-to-date basis. The stock also outpaced the S&P 500 Index’s rally of 12%.


What’s Favoring the Stock?

CONMED’s General Surgery segment continues to boost the company’s top line, owing to its sustained solid performance. The company’s unique products and solutions within this segment help it get a competitive edge in the MedTech space. Of the most unique products under General Surgery, the Anchor Tissue Retrieval bag deserves a mention.

Moreover, CONMED boasts a broad product portfolio that allowed it to accelerate top-line growth over a considerable period. Additionally, product innovations will not only fortify its product portfolio but also enhance overall performance.

Further, the company’s continued focus on Research and Development (R&D) helps in instilling investor confidence. Looking forward, CONMED’s management confirmed that it will continue to increase investments in R&D, which is likely to be 4.5-5% of net sales in 2019.

The company is reaping benefits from the increasing trend of utilizing minimally invasive techniques as a substantial percentage of its products were created for these procedures.

In fact, a research report by Allied Market Research suggests that the global minimally invasive surgical instruments market is estimated to reach $52.98 billion by 2023 at a CAGR of 8.7% from 2017 to 2023. We believe solid market trends like these would fortify CONMED’s foothold in the niche space.

Notably, a raised 2019 outlook buoys optimism for the stock. CONMED expects 2019 sales growth to be 9-10% (up from the previously guided range of 5-6%) at cc. This projection includes an increase of 5.25-6.25% in its organic constant-currency sales growth and the addition of the Buffalo Filter buyout.

The company forecasts adjusted diluted net earnings per share of $2.47 to $2.52, up from the previously mentioned $2.42-$2.47. This indicates growth of 13-16% over 2018.

Which Way are Estimates Headed?

For 2019, the Zacks Consensus Estimate for revenues is pegged at $945.2 million, indicating an improvement of 9.9% from the year-ago quarter. The same for earnings stands at $2.50, suggesting growth of 14.7% from the year-ago reported figure.

Other Key Picks

Some other top-ranked stocks from the broader medical space are Cardiovascular Systems, Inc. CSII, Quidel Corporation QDEL and Heamonetics Corporation HAE, each currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cardiovascular Systems has an earnings growth rate of 33.3% for the fourth quarter of fiscal 2019.

Quidel Corporation has a long-term earnings growth rate of 25%.

Heamonetics has a long-term earnings growth rate of 13.5%.

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Cardiovascular Systems, Inc. (CSII) : Free Stock Analysis Report
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