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Here's Why You Should Invest in NuVasive (NUVA) Stock Now

Zacks Equity Research

NuVasive, Inc. NUVA has been showing solid progress on robust performance within its U.S. Spinal Hardware and U.S. Surgical Support businesses as well as rapid expansion into international markets.

The company has a market cap of $3.30 billion. It has an expected earnings growth rate of 12.8% for the next five years.

Over the past six months, the company’s share price has outperformed its industry. The stock has gained 8.8% compared with the industry’s 4.6% growth.

Riding on solid prospects, this Zacks Rank #2 (Buy) stock is worth investing in, at the moment.

What’s Favoring the Stock?

Strong Segmental Performance: In the second quarter, revenues at the U.S. Spinal Hardware business increased 6.3% year over year. The upside was driven by a solid increase in case volumes, and tangible growth in both the XLIF and the ALIF franchises, led by continued adoption of NuVasive's X360 system. The revenue upside in the U.S. Surgical Support business was driven by 6% growth in NuVasive Clinical Services revenues.

 

Product Portfolio Expansion: In the last reported quarter, the company expanded its advanced material science (AMS) business with products like Modulus TLIF-O, a coarse titanium spine implant engineered for TLIF, the most commonly performed surgical procedure in the spine industry. Also, NuVasive had its first case use of Cohere XLIF, the first of its kind lateral Porous PEEK implant for XLIF in lateral single position surgery. As a major milestone in the field of enabling technology, in July, NuVasive announced the launch of the Pulse integrated technology platform. The company anticipates gaining the CE Mark for this platform later in the year.

International Business Flourishes: In the second quarter, the company registered strong international revenues, reflecting 7% year-over-year growth at CER. The EMEA region witnessed solid growth, driven by strong contribution from Italy, Spain and the DACH (D [Germany], A [Austria] and CH [Switzerland]) region. Revenues earned from the Asia-Pacific region grew on contributions from Japan, Australia and New Zealand.

Stable Liquidity Position:The company exited the second quarter of 2019 with cash and cash equivalents, and short-term marketable securities of $128.4 million. Year to date, net cash provided by operating activities totaled $93.4 million. This indicates promising returns to shareholders.

Which Way Are Estimates Heading?

For the third quarter of 2019, the Zacks Consensus Estimate for earnings is pegged at 54 cents, which indicates a 3.6% decline from the year-ago quarter’s reported figure. The same for revenues is pegged at $283.6 million, which calls for a year-over-year rise of 4.6% from the figure reported in the prior-year quarter.

For 2019, the Zacks Consensus Estimate for earnings is pegged at $2.32, which suggests a 4% year-over-year rise. The same for revenues is pegged at $1.15 billion, which implies a 4.8% rise from the prior-year quarter’s reported figure.

Other Key Picks

A few other top-ranked stocks in the broader medical space are Medtronic MDT, Baxter BAX and Amedisys AMED, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medtronic’s long-term earnings growth rate is expected to be 7.13%.

Baxter’s long-term earnings growth rate is projected at 12.8%.

Amedisys’ long-term earnings growth rate is expected to be 16.26%.

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