Penumbra (PEN) Stock Up 16.2% YTD: Will the Rally Continue?
Penumbra PEN shares have surged 16.2% year to date, outperforming the industry’s growth of 1.2%. The Medical sector has declined 7.2% in the said time frame. The company has a market capitalization of $12.12 billion.
This Zacks Rank #2 (Buy) stock’s consistent revenue growth momentum is being driven by the extraordinary patient outcomes with Lightning Flash, Lightning Bolt 7 and RED 72 with SENDit. Its earnings are expected to grow 42.2% in the next year.
Will the Upside Continue?
The consensus estimate for 2023 revenues is pegged at $1.06 billion, indicating a year-over-year improvement of 25.3%. PEN’s ROE for the trailing 12 months was 5.54%, better than the industry average of (30.7%).
Penumbra is demonstrating strong growth within the company’s Vascular business, banking on the rapid increase in sales of the company’s vascular thrombectomy products in the United States. In this region, the company is benefiting from sales of new products and further market penetration of existing products. Despite supply-related issues, the Lightning Flash launch earlier in 2023 exceeded Penumbra’s expectations, becoming the biggest product launch in the company's history. Also, the company successfully launched the Lightning Bolt 7 arterial thrombectomy system in June following its FDA clearance in March 2023. Lightning Flash and Lightning Bolt are also driving an acceleration in Penumbra’s U.S. vascular thrombectomy franchise, up 42% year over year in the third quarter. The company expects to see a robust growth trajectory in the Vascular arm in the next five years and beyond.
Internationally, the company projects early success with the launch of its first-generation computer-aided products in Europe. Penumbra plans to expand access to its most-advanced thrombectomy products to its international vascular teams over the next few years. In addition, PEN’s international teams and partners envision enormous potential to further expand the company’s leadership in stroke intervention outside the United States with SENDit and Thunderbolt over the coming years. Among recent developments, in 2023, the company launched the RED catheter for stroke and the first-generation computer-orchestrated thrombectomy products Lightning 12 and 7 in Europe.
Within the Neuro franchise, Penumbra is witnessing an acceleration in the company’s stroke business. Further, it is experiencing strong customer uptake of RED 72 (with the proprietary SENDit technology), RED 43 and BMX81. These products represent meaningful advances in both the trackability of 0.072-sized aspiration catheters and distal clot removal. According to Penumbra, coupled with the recently launched BMX81, these products will continue to increase the company’s growth and market share in Neuro, particularly as physicians continue to realize the trade-off with oversized aspiration catheters in the market in the past several years.
The upbeat guidance raises investors’ optimism about the stock. For the fourth quarter of 2023, the company projects total company revenue growth to accelerate 28-31% year over year. This correlates to the midpoint of the 2023 annual guidance range of $1.05-$1.07 billion, suggesting a 24-26% improvement from 2022 levels. The Zacks Consensus Estimate for fourth-quarter and full-year 2023 revenues is pegged at $290.2 million and $1.06 billion, respectively.
Estimate Trends
The Zacks Consensus Estimate for PEN’s 2023 earnings per share (EPS) has moved from $1.73 to $2.04 in the past 90 days, reflecting analysts’ optimism.
Key Picks
Some other top-ranked stocks in the broader medical space are Haemonetics HAE, Insulet PODD and DexCom DXCM. While Haemonetics and DexCom each carry a Zacks Rank #2 (Buy), Insulet sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ shares have increased 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for Insulet’s 2023 EPS have increased from $1.61 to $1.90 in the past 30 days.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Estimates for DexCom’s 2023 EPS have increased from $1.23 to $1.41 in the past 30 days.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Haemonetics Corporation (HAE) : Free Stock Analysis Report
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Penumbra, Inc. (PEN) : Free Stock Analysis Report
