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Integra (IART) Tissue Technologies Rebounds Amid Supply Woe

·3 min read

Integra LifeSciences Holdings Corporation IART has been witnessing certain major developments overseas. However, a tough competitive landscape is a concern.

Shares of this Zacks Rank #3 (Hold) company have outperformed its industry in the past year. The stock has gained 32.3% compared with the industry’s 13.3% rise.

Integra exited the first quarter of 2021 with better-than-expected earnings and revenues. The ongoing recovery in the company’s businesses looks encouraging.

The Codman Specialty Surgical (CSS) and Orthopedics and Tissue Technologies (OTT) segments reflected a gradual recovery in procedure-based market as well as an improvement in hospital capital spending during the first quarter. The year-over-year growth in the CSS segment buoys optimism. Robust demand for the company’s products is also a positive.

Integra LifeSciences Holdings Corporation Price

Integra LifeSciences Holdings Corporation Price
Integra LifeSciences Holdings Corporation Price

Integra LifeSciences Holdings Corporation price | Integra LifeSciences Holdings Corporation Quote

CSS segment grew 4.2% year over year in the first quarter of 2021. Global neurosurgery sales were flat during the quarter, organically. Sales in advanced energy increased mid-single digits and were led by the recovery of capital sales in international markets, driven by Japan, China and other Asia Pacific indirect markets. Further, international sales in CSS increased mid-single digits, led by growth in Asia.

In January 2021, Integra acquired ACell, Inc. Per management, the addition of the ACell portfolio and expansion of tissue technology platform in Integra is generating positive customer feedback.

The company is currently investing into its two early-stage technology platforms, anti-thrombus coding technology (to reduce catheter obstructions) and a technology platform for minimally invasive neuro surgery.

On the flip side, since March 2021, as the pandemic took a graver form, demand for the company’s surgical procedures declined significantly. This was because healthcare providers started to reallocate resources to address the surging demand caused by the COVID-19 outbreak. According to Integra, there was a dramatic sales decline that occurred as soon as surgical procedures were postponed on a wide scale.

The contraction in gross margin looks worrying as well. The company faces stiff competition as well as foreign exchange fluctuation.

Key Picks

A few better-ranked stocks from the broader medical space are National Vision Holdings, Inc. EYE, The Cooper Companies, Inc. COO and Envista Holdings Corporation NVST. While National Vision sports a Zacks Rank #1 (Strong Buy), both The Cooper Companies and Envista Holdings carry a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank stocks here.

National Vision has a projected long-term earnings growth rate of 23%.

The Cooper Companies has a projected long-term earnings growth rate of 11%.

Envista Holdings has an estimated long-term earnings growth rate of 26%.

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Integra LifeSciences Holdings Corporation (IART) : Free Stock Analysis Report

The Cooper Companies, Inc. (COO) : Free Stock Analysis Report

National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report

Envista Holdings Corporation (NVST) : Free Stock Analysis Report

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