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Here's Why You Should Hold on to CONMED (CNMD) Stock Now

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CONMED Corporation CNMD is well-poised for growth, courtesy of a robust product portfolio and strength in the General Surgery business. However, data security threats remain a concern.

Shares of this currently Zacks Rank #3 (Hold) player have declined 30.5% compared with the industry’s decrease of 10.5% over the past year. The S&P 500 Index has lost 11.3% in the same time frame.

CONMED, with a market capitalization of $2.82 billion, is a major medical products manufacturer specializing in surgical instruments and devices for minimally invasive procedures and monitoring. CNMD anticipates earnings to improve 12.3% over the next five years and has a trailing four-quarter earnings surprise of 8.31%, on average.

Key Catalysts

CONMED offers a broad line of surgical products. CNMD’s product portfolio consists of several new devices in the Orthopedic, Laparoscopic, Robotic, Open Surgery, Gastroenterology, Pulmonary and Cardiology sections. Innovative products like Hi-Fi Tape and Hi-Fi suture interface represent a critical component of repair security in the rotator cuff repair space.

Other notable offerings include the MicroFree platform in Orthopedics, the TruShot, the Y-Knot Pro and the CRYSTALVIEW Pump. Of the unique products under General Surgery, the Anchor Tissue Retrieval bag deserves mention. This is one of the major platforms in CONMED’s specimen bag portfolio. With increased product offerings, CONMED can accelerate its top-line growth.

General surgery comprises a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic and gastrointestinal procedures, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. CONMED’s unique products and solutions within the General Surgery segment provide it with a competitive edge in the MedTech space.

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In the first quarter of 2022, the General Surgery segment’s revenues improved 7.7% at a constant exchange rate (CER). Domestically, General Surgery sales rose 7.5% year over year on a reported basis, while international sales climbed 8.2% at CER. According to CONMED’s investor presentation, global General Surgery products are anticipated to grow at above-market rates on a long-term basis on the back of additional sales representatives and improving customer engagement.

Primary Concern

CONMED relies extensively on information technology (IT) systems for storing, processing and transmitting its electronic, business-related information assets used in or necessary to conduct business. The data that CONMED stores and processes may include customer payment information and other types of sensitive business-related information. Numerous evolving cybersecurity threats pose potential risks to the security of CNMD’s IT systems, networks and services as well as the confidentiality, availability and integrity of its data.

Estimate Trend

For 2022, the consensus mark for adjusted earnings per share stands at $3.52, suggesting an improvement of 9.7% from the previous year’s level. The Zacks Consensus Estimate for 2022 revenues is pegged at $1.12 billion, indicating growth of 11% from the year-ago reported figure.

Stocks to Consider

Some better-ranked stocks from the broader medical space are AMN Healthcare Services AMN, ShockWave Medical SWAV and ViewRayVRAY.

AMN Healthcare’s earnings surpassed estimates in each of the trailing four quarters, the average being 15.6%. AMN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 9.2% came against the industry’s (1.26%).

ShockWave Medical beats on earnings in each of the trailing four quarters, the average surprise being 189.99%. SWAV currently carries a Zacks Rank of 1.

ShockWave Medical’s earnings yield of 1.01% came against the industry’s (7.31%).

ViewRay’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average being (1.67%). VRAY currently carries a Zacks Rank of 2.

VRAY’s earnings yield is (19.19%) compared with the industry’s (7.31%).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CONMED Corporation (CNMD) : Free Stock Analysis Report
AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report
ViewRay, Inc. (VRAY) : Free Stock Analysis Report
ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
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