Integra LifeSciences Codman Arm Strong, Competition Rife
On Aug 13, we issued an updated research report on Integra LifeSciences Holdings Corporation IART. The company has been witnessing certain major developments overseas. However, a tough competitive landscape raises concerns.
This New Jersey-based company is a leading developer, manufacturer and marketer of surgical implants and medical instruments for use in neurosurgery, extremity reconstruction, orthopedics and general surgery. Shares of the company have outperformed the industry over the past three months. The stock has lost 0.2%, narrower than the 4.8% decline of the industry it belongs to.
Integra LifeSciences registered a strong year-over-year rise in revenues during the second quarter of 2018 on the back of the company’s recently acquired business. Solid growth across all business segments has been a key growth catalyst. Success within its channel expansion strategy and Codman integration also buoys hope.
Notably, last December, the company announced plans to expand its sales channel, improve focus and competitiveness plus better align its product portfolio. Moreover, higher year-over-year investments in research and development are encouraging. The company’s promising view also instills investor confidence in the stock.
Integra LifeSciences Holdings Corporation Price
Integra LifeSciences Holdings Corporation Price | Integra LifeSciences Holdings Corporation Quote
At the end of the second quarter, Integra LifeSciences notified that it is currently running the entire Codman Specialty Surgical business independently in the United States, Canada, Australia and New Zealand. In the period, the company also transitioned its Codman China business a year in advance. Collectively, this represents roughly 60% of the global revenues associated with the acquired Codman business.
Integra LifeSciences experienced 3.7% organic growth in the Codman Specialty Surgical segment during second-quarter 2018, lying above the company’s expectations.
We are also upbeat about the company’s Regenerative Technologies, the largest franchise under Orthopedics and Tissue Technologies. In the second quarter, the company registered 10% growth in this franchise, primarily banking on its portfolio’s broad-based strength.
Meanwhile, Integra LifeSciences faces intense competition in the surgical implants and medical instruments market. The company needs continuous innovation to fend off this stiff rivalry among peers. Moreover, consolidation in the industry could result in an acute pricing pressure.
Also, a significant margin contraction caused by escalating costs and expenses is a woe.
Key Picks
Integra LifeSciences currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the MedTech space are Inogen Inc INGN, Integer Holdings Corporation ITGR and The Cooper Companies COO, all three sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen has an expected long-term earnings growth rate of 22.5% while the same for Integer Holdings and The Cooper Companies is pegged at 15% and 10.8%, respectively.
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