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Wright Medical Group Up to Strong Buy on INFINITY Product Launch

Zacks Equity Research

On Jul 9, Zacks Investment Research upgraded Wright Medical Group, Inc. (WMGI) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #2 (Buy).

Why the Upgrade?

Wright Medical Group witnessed an upward estimate revision for 2014 over the last 30 days, with no downward revision. Consequently, the Zacks Consensus Estimate for 2014 increased 0.8% to stand at a narrower loss of $1.32 per share.

Shares of this specialty orthopaedic company have been on the rise following the recent commercial launch of its INFINITY Total Ankle Replacement System across the U.S. Featuring a low-profile implant design and a straightforward surgical approach, the INFINITY Total Ankle Replacement System aids the treatment of patients with end-stage ankle arthritis.

The INFINITY Total Ankle Replacement System should help Wright Medical Group fortify its leadership position and multi-year competitive lead in the total ankle replacement market.

This breakthrough offering from the INFINITY product range will likely accelerate the ongoing market conversion from fusion procedures to total ankle replacement. It seems to pose a significant threat to Stryker Corporation’s (SYK) recently acquired Scandinavian Total Ankle Replacement or STAR Ankle System from Small Bone Innovations, a Morrisville, PA-based joint replacement system maker.

For the first quarter of 2014, Wright Medical Group posted a wider adjusted net loss of 34 cents per share compared with a loss of 8 cents in the same quarter of 2013. However, the loss was narrower than the Zacks Consensus Estimate of a loss of 42 cents. The company delivered positive earnings surprises in 3 of the last 4 quarters, with an average beat of 2.7%.

Revenues grew 26.2% during the last reported quarter, driven by strong sales in the Foot and Ankle product line as well as continued progress across the company’s international markets.

Wright Medical Group continues to focus on driving sales productivity gains in its U.S. foot and ankle business and expedite international business growth. The advanced INFINITY Total Ankle Replacement System along with several new products slated to launch this year is expected to fuel growth and profits at Wright Medical Group.

Other Stocks to Consider  

Some other medical product stocks that warrant a look are OraSure Technologies, Inc. (OSUR) and Cardiovascular Systems Inc. (CSII). While OraSure Technologies sports a Zacks Rank #1 (Strong Buy), Cardiovascular Systems carries a Zacks Rank #2 (Buy).

Read the Full Research Report on SYK
Read the Full Research Report on WMGI
Read the Full Research Report on OSUR
Read the Full Research Report on CSII

Zacks Investment Research