Reasons to Add Inari Medical (NARI) Stock to Your Portfolio
Inari Medical, Inc. NARI is well poised for growth, backed by a huge market opportunity for products and its commitment to understand the venous system. However, its dependency on adoption of products is concerning.
Shares of this Zacks Rank #1 (Strong Buy) company have lost 10.8% year to date against the industry’s 8.8% growth. The S&P 500 Index has risen 16.9% in the same time frame.
NARI, with a market capitalization of $3.32 billion, is a commercial-stage medical device company. It seeks to develop products for treating and changing the lives of patients suffering from venous diseases.
The company’s earnings yield of (0.5%) compares favorably with the industry’s (6.3%). Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 39.03%.
Image Source: Zacks Investment Research
What’s Weighing on the Stock?
Inari Medical is spearheading the creation and commercialization of devices that are purposefully built, keeping in mind the specific characteristics of the venous system, its diseases and unique clot morphology.
The company’s in-depth knowledge of its target market and commitment to understand the venous system have allowed it to figure out the unmet needs of patients as well as physicians. This, in turn, has enabled NARI to quickly innovate and improve its products while updating its clinical and educational programs.
In January, the company enrolled the first patient in its prospective randomized controlled trial — DEFIANCE. The idea was to compare the clinical outcomes of ClotTriever System to anticoagulation, only in patients with iliofemoral deep vein thrombosis (DVT).
A successful completion will support the favorable profile of Inari Medical’s key product, ClotTriever, in treating DVT patients.
Last month, Inari launched two new purpose-built products — the RevCore thrombectomy catheter and the Triever16 Curve catheter.
RevCore is currently the first mechanical thrombectomy device designed to address venous in-stent thrombosis, whereas the Triever16 Curve catheter is the latest addition to Inari Medical’s FlowTriever platform.
The latest launches are expected to significantly solidify Inari Medical’s foothold in the Venous Stent Thrombosis and Venous Thromboembolism (VTE) treatment space globally.
In May, the company announced the planned enrollment of the PEERLESS II trial, its third randomized controlled trial (RCT) in VTE. PEERLESS II is a prospective, global, multi-center RCT, comparing the outcomes of intermediate-risk pulmonary embolism (PE) patients treated with the FlowTriever system versus anticoagulation alone.
The same month, Inari Medical announced first-quarter 2023 results, wherein it registered a solid uptick in its year-over-year revenues. Management also confirmed the receipt of FDA clearances for several new products. This is expected to drive market expansion while safeguarding the company from both existing and future competition.
In March, NARI announced positive results from the FLAME study in high-risk/massive PE. FLAME is the largest prospective study of interventional treatment in high-risk PE, a patient population with a historical mortality rate of 25-50%.
The company reported total revenues of $116.2 million for the first quarter, indicating a 34% improvement year over year. It expanded its territories to more than 275 in 2022.
Inari Medical expects total revenues of $478-$488 million for 2023, indicating growth of approximately 24.6-27.2% from the previous year’s reported actual.
What’s Weighing on the Stock?
Most of NARI’s product sales and revenues come from a limited number of hospitals. The company’s growth and profitability mainly depend on its ability to boost physician and patient awareness of its products. These also depend on how keen physicians and hospitals are to adopt its products and perform catheter-based thrombectomy procedures on patients suffering from venous thromboembolism.
Inari Medical’s inability to validate the benefits of its products and catheter-based thrombectomy procedures will result in limited adoption of the same. Moreover, it might not happen as quickly as expected. These factors, in unison, might negatively impact NARI’s business and financial condition.
Estimates Trend
The Zacks Consensus Estimate for revenues is pegged at $482.3 million for 2023, indicating a 26% increase from the previous year’s reported number. The bottom-line estimate for the company is pinned at a loss of 27 cents, implying a 50.9% improvement from that recorded a year ago. The consensus estimate has narrowed from a loss of 51 cents per share to a loss of 27 cents for 2023 in the past 60 days.
Inari Medical, Inc. Price
Inari Medical, Inc. price | Inari Medical, Inc. Quote
Other Stocks to Consider
A few other top-ranked stocks from the broader medical space are Alcon ALC, DexCom DXCM and Hologic HOLX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcon has an estimated long-term growth rate of 14.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.85%.
ALC’s shares have rallied 18.3% year to date compared with the industry’s 8.8% growth.
DexCom has an estimated long-term growth rate of 40.4%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 15.19%.
DXCM’s shares have risen 12.8% year to date compared with the industry’s 8.8% growth.
Hologic has an estimated earnings growth rate of 4.1% for fiscal 2024. HOLX’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 27.32%.
The company’s shares have rallied 6.8% year to date compared with the industry’s 8.8% growth.
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
Hologic, Inc. (HOLX) : Free Stock Analysis Report
Alcon (ALC) : Free Stock Analysis Report
DexCom, Inc. (DXCM) : Free Stock Analysis Report
Inari Medical, Inc. (NARI) : Free Stock Analysis Report
