U.S. Markets closed

Integra Rides on Channel Expansion Strategy, New Alliances

Zacks Equity Research
Cheaper valuation, better earnings growth prospects, solid performance in Stress Test, dividend hike announcements and less chances of a rate cut should position financial ETFs in a good spot in 2H.

On Feb 27, we issued an updated research report on Integra LifeSciences Holdings Corporation IART. The company has been noticing certain major developments overseas. However, a tough competitive landscape is concerning.

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 S&P 500 index over the past year. While the stock has gained 6.3%, the index has risen 4.3%.

Integra exited the fourth quarter of 2018 on a solid note with better-than-expected numbers. Last year marked the fifth consecutive year of double-digit revenues and EPS growth. The company’s progress with its channel expansion strategy and Codman integration buoys optimism.

Benefitting from product launches and an enhanced sales force performance, the company expects faster organic growth during the second half of 2019. Notably, it is successfully executing its plans within Orthopedics and Tissue Technologies segment to broaden sales channel, improve focus and competitiveness and better align the company’s product portfolio with clinical customers.

In this segment, the company has realigned 100% of in-patient wound reconstruction and orthopedic territories as part of its channel extension strategy. In the second half of 2018, the company saw a positive response in the sales performance of regenerative technologies franchises.

Moreover, heavy investments in research and development were encouraging. The company has also entered into several partnerships including a program with Healogics wherein Integra is a primary provider of cellular and tissue-based products for the treatment of acute and chronic wounds.

Meanwhile, Integra faces severe competition in the surgical implants and medical instruments market. The company needs continuous innovation to fend off rivalry. Moreover, consolidations in the industry could induce intense pricing pressure.

Zacks Rank & Key Picks

Currently, Integra has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are ABIOMED, Inc., ABMD, Penumbra, Inc., PEN and Masimo, Inc. MASI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ABIOMED’s long-term earnings growth rate is expected to be 27.67%.

Penumbra’s long-term earnings growth rate is projected to be 20%.

Masimo’s long-term earnings are predicted to grow 15.6%.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

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
Masimo Corporation (MASI) : Free Stock Analysis Report
ABIOMED, Inc. (ABMD) : Free Stock Analysis Report
Penumbra, Inc. (PEN) : Free Stock Analysis Report
Integra LifeSciences Holdings Corporation (IART) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research