Here's Why You Should Buy Integra LifeSciences Stock Now
Zacks Investment Research | Mar 17, 2020 05:23AM ET
Integra LifeSciences (NASDAQ:IART) is progressing well with strategies like acquisitions, product launches and international expansion. Robust performance by the Codman Specialty Surgical (“CSS”) and Regenerative Technologies segments has been a key growth driver of late.
This $3.66-billion leader of regenerative medicines expects earnings growth of 11.9% over the next five years. Also, the company has a trailing-four quarter positive earnings surprise of 6.3%, on average.
Robust Q4 Earnings
Integra exited fourth-quarter 2019, with adjusted earnings per share beating the consensus mark. The CSS segment benefitted from integration activities from the Codman acquisition and venturing into faster-growing markets like China and Japan. Global CSS sales in the fourth quarter were led by its core neurosurgery portfolio, including product launches, strength in Europe and robust growth in China and Japan.
Expansion of both margins is encouraging as well. The 2020 guidance for organic revenue growth and adjusted EPS appear strong.
Let’s delve deeper into the other factors that substantiate the company’s Zacks Rank #2 (Buy).
CSS Segment Holds Potential: At the end of the fourth quarter, revenues from the CSS segment rose 4.1% (organic growth 5.6%). The upside was driven by the completion of all integration activities related to the Codman acquisition, scale expansion, product launches and venturing into faster-growing markets like China and Japan. This trend is expected to drive the company in the long term.
Strength in Regenerative Technologies: In the fourth quarter, the OTT segment registered 1.3% growth year over year. Organically, the segment grew 1.6% owing to sales uptick in wound reconstruction. Wound reconstruction, in turn, rose due to the company’s performance in inpatient and plastics and reconstructive portfolios. It also witnessed a positive momentum in both ankle and shoulder portfolios, which registered robust growth.
Integra expects an improvement in its international performance on benefits from the combination of new products like the ankle revision and small post baseplate along with the expansion of its established commercial team.
Solid Growth in International Business: Integra saw certain key developments on the overseas front. International sales within CSS have been strong in recent times driven by growth in core neurosurgery business and strength in certain key markets such as Europe, Canada, China, and Japan. Integra is looking forward to investment opportunities in the Asian market in order to grow its international business much faster than the United States. In line with this, the company is preparing to launch several products in China and Japan. The strong fourth-quarter performance of DuraGen in Japan, after its launch in the third quarter, buoys optimism.
Get The News You Want
However, due to foreign exchange fluctuations and tough competition, the stock has underperformed its industry . In the past year, the stock has lost 28.2% compared with 21.2% loss of its industry.
Estimates Trend
The company is witnessing a positive estimate revision trend for 2020. Over the past 30 days, the Zacks Consensus Estimate for its earnings has inched up 1 % to $3.02 per share.
The Zacks Consensus Estimate for the company’s first-quarter 2020 revenues is pegged at $369.3 million, suggesting a 2.7% rise from the year-ago reported number.
Key Picks
Some other top-ranked stocks from the broader medical space are ResMed Inc. MDT and Hill-Rom Holdings, Inc. (NYSE:HRC) .
ResMed has a projected long-term earnings growth rate of 12%. It currently carries a Zacks Rank #2. You can see
Medtronic’s long-term earnings growth rate is estimated at 7.4%. The company presently carries a Zacks Rank #2.
Hill-Rom’s long-term earnings growth rate is estimated at 11.1%. It currently carries a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.