Integer Holdings Corporation ITGR is well-poised for growth on portfolio management, and strong presence in the broader MedTech space. However, stiff competition remains a concern.
Shares of Integer Holdings have gained 14.3% on a year-to-date basis, against the industry’s decline of 3.5%. Meanwhile, the S&P 500 Index rallied 9.1% in the same time frame.
The company, with a market capitalization of $3.06 billion, manufactures and develops medical devices and components primarily for original equipment manufacturers (OEMs), which depend on it to design, develop and produce intellectual property protected medical device technologies. The company’s earnings growth rate for the second quarter of 2021 is pegged at 168.8%. Moreover, it has a trailing four-quarter earnings surprise of 17.2%, on average.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
What’s Deterring the Stock?
Integer Holdings currently operates in the highly competitive MedTech market. Consequently, intense competition remains a headwind.
What’s Favoring the Stock?
Integer Holdings has initiated a new approach to drive sales and profitable growth, following a comprehensive strategic review of its business. The company’s new strategy has two overarching themes that are focused on portfolio management and operational excellence. This will help the company to realize its vision of enhancing patient lives.
Based on consistent efforts to simplify operations, Integer Holdings has been exhibiting profitability since the last couple of quarters and we expect the momentum to continue in the near term.
Management also announced that it has been witnessing revenue growth faster than markets and profits twice the rate of revenue growth. The company plans to invest more in the areas of Cardio & Vascular, Neuromodulation, and Electrochem to accelerate sales and market penetration. Integer Holdings has also been enhancing profitability in areas of Advanced Surgical, Orthopedics, and Power Solutions through focused sales growth and cost structure initiatives.
Further, the company continues to benefit from strong presence in the broader MedTech space. This, in turn, will drive overall performance.
For 2021, the Zacks Consensus Estimate for revenues is pegged at $1.19 billion, indicating an improvement of 10.4% from the year-ago period. The same for earnings stands at $3.72 per share, suggesting growth of 34.3% from the prior year.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Hologic, Inc. HOLX, Hill-Rom Holdings, Inc. HRC and Cantel Medical Corp. CMD, each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is expected at 15.4%.
Hill-Rom Holdings’ long-term earnings growth rate is estimated at 7.3%.
Cantel Medical’s long-term earnings growth rate is estimated at 19%.
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