U.S. Markets close in 2 hrs 29 mins

Mazor Robotics-Medtronic's Mazor X Partnership Strengthens

Zacks Equity Research

Mazor Robotics MZOR recently announced that its strategic partnership with Medtronic Plc. MDT for the commercialization and co-promotion of Mazor X platform, an innovative guidance system for spine surgery, is going strong.

The deal was signed in early 2016 after Mazor Robotics received a massive $20 million equity investment from Medtronic, a leading medical device company. Medtronic had made an initial investment of $11.9 million in Mazor Robotics. Later, the company completed a $20 million investment for a 7.27% stake in Mazor.

Per management, since the signing of the agreement, Mazor and Medtronic have actively invested in co-marketing, promotion and training efforts toward the commercialization of Mazor X.

Furthermore, the recent update on the deal suggests that hundreds of highly experienced clinical specialists at both the companies are raising awareness and supporting the commercialization process.

Meanwhile, we note that Mazor X is a transformative guidance system for simplifying spine surgeries with advanced features and ‘sophisticated integrative abilities’. In fact, in the second half of 2016, the company gained prominence in the niche markets, courtesy of the launch of the Mazor X platform and the successful execution of the Medtronic co-marketing and co-promotional agreement.

Mazor Robotics Ltd. Price


Mazor Robotics Ltd. Price | Mazor Robotics Ltd. Quote

Stock Performance

The price performance of Mazor X has been encouraging of late. Over the last three months, the stock gained 10.8%, outshining the Zacks classified Medical Instruments sub-industry’s gain of roughly 8.5%. Furthermore, the stock’s current return is higher than the S&P 500’s return of 5.3% over the same time frame.

Coming to the estimate revision trend of the stock, one analyst raised estimates in the last two months compared to no movement in the opposite direction for the full year. This justifies the stock’s Zacks Rank #2 (Buy).

However, the current year estimates stand at a loss of 52 cents per share, way narrower than the loss of 81 cents estimated two months ago.

Bottom Line

We are also hopeful about the upbeat market trends in the global spine surgery market. A research report by Markets And Markets suggests that the niche markets are estimated to reach a worth of $17.27 billion by 2021, multiplying at a CAGR of 5.3%.

In fact, the increasing utilization rate of the company’s Mazor X is quite compelling. We believe that the commercialization cycle of the Mazor X platform has been following a planned trajectory with a growing customer base.

Meanwhile, the Medtronic agreement paves the way to develop synergistic products utilizing Mzaor Robotics’ precision guided surgery know-how, advanced software capabilities and Medtronic’s implant product portfolio.

Key Picks

Other favorably ranked stocks in the broader medical sector include Avinger, Inc. AVGR and Fluidigm Corporation FLDM. Notably both Fluidigm and Avinger carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Avinger projects sales growth of 30.6% for the current year. Meanwhile, over the last four trailing quarters, the company posted earnings beats, the average being 4.4%.

Fluidigm Corporation has a long-term expected earnings growth rate of 25%. The stock posted a positive earnings surprise of 1.6% in the last reported quarter.

Zacks' 2017 IPO Watch List

Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.

One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>

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
Fluidigm Corporation (FLDM): Free Stock Analysis Report
Medtronic PLC (MDT): Free Stock Analysis Report
Avinger, Inc. (AVGR): Free Stock Analysis Report
Mazor Robotics Ltd. (MZOR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research