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Why You Must Add Merit Medical (MMSI) Stock to Your Portfolio

Zacks Equity Research
·3 min read

Merit Medical Systems, Inc. MMSI is gaining traction from portfolio expansion and solid prospects in its Peripheral Intervention unit.

The company, with a market capitalization of $3.03 billion, is a leading developer of peripheral and cardiac intervention products. Its earnings are expected to improve 12.6% over the next five years. Also, this currently Zacks Rank #2 (Buy) company has a trailing four-quarter earnings surprise of 278.2%, on average.

In the past three months, the stock has gained 26.6% compared with 15.4% growth of its industry.

Let’s delve deeper into the factors working in favor of the company.

Solid Product Portfolio Expansion: Merit Medical consistently gained significant momentum from new products and is optimistic about its product pipeline including radio and electrophysiology products. In April 2020, the company initiated production of sample collection and transport kit, consisting of a nasopharyngeal swab and transport vial, used for collecting samples from the suspected carriers of COVID-19 infection. In March, management announced the addition of the SCOUT Access Guide to the company’s wire-free radar localization portfolio. This slim Guide option was developed to facilitate oncoplastic breast surgery and for greater ease of lymph node dissection.

This product portfolio expansion is expected to drive growth.

Developments on Regulatory Front a Boon: Positive feedbacks and approvals from the top-notch regulatory bodies aided Merit Medical in recent times. Recently, the company confirmed that it has more than 50 active R&D products in its portfolio.

In the third quarter of 2020, the company secured an IDE nod for the WRAPSODY AV Access Efficacy Study, also known the WAVE study, and an IDE approval for a smaller evaluation called the WRAPSODY Central Feasibility Study or the Wave Central study.

These approvals are significant tailwinds to the company’s performance.

Peripheral Intervention Unit Holds Promise: The company’s peripheral intervention unit consists of Peripheral Drainage & Biopsy, Peripheral Angiography, Peripheral Intervention and Peripheral Access Portfolio. Merit Medical also offers low-profile ASAP Aspiration Catheters, which provide clinicians with two options for the safe and efficient removal of fresh, soft emboli and thrombi from vessels. The Cardiovascular unit reported third-quarter revenue growth of 0.8% year over year owing to a 3% increase in Peripheral Intervention revenues.

 

Estimate Trend

For 2020, the Zacks Consensus Estimate for the company’s revenues is pegged at $956.3 million, suggesting a 3.9% fall from the year-ago reported number.

For 2020, the Zacks Consensus Estimate for the company’s earnings stands at $1.56, indicating a 6.9% rise from the year-earlier reported figure.

Other Key Picks

Some other top-ranked stocks from the broader medical space are McKesson Corporation MCK, DaVita Inc DVA and IDEXX Laboratories IDXX, each carrying a Zacks Rank #2, presently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McKesson has a projected long-term earnings growth rate of 6.6%.

DaVita has a projected long-term earnings growth rate of 18.3%.

IDEXX has an estimated long-term earnings growth rate of 15.8%.

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