Here's Why You Should Hold On to Integra LifeSciences Stock
Integra LifeSciences Holding Corporation IART has been making solid progress by sharpening its focus on areas mentioned under the 4-pillar strategy through improved planning and communication, optimization of the infrastructure and strategically aligned tuck-in acquisitions.
The company has a market cap of $4.25 billion. It has an expected earnings growth rate of 12.8% for the next five years.
Riding on several solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to, for now.
What’s Working in Favor of the Stock?
Codman Specialty Surgical (CSS) Segment holds potential: Integra is currently running the entire CSS business independently in the United States, Canada, Australia, New Zealand and China. In the first quarter of 2019, the company successfully exited a transition services agreement covering 15 new countries in Western Europe and converted to a single global instance of ERP system.
Integra LifeSciences Holdings Corporation Price
Robust performance within Regenerative technologies:In recent months, the company has invested in regenerative manufacturing facilities to boost capacity by adding shifts, running additional lines and making capital improvements to drive efficiencies. Among the recent launches, the full market release of Titan Reverse Shoulder System-S (RSS-S) is significant.
Solid growth in international business: Integra LifeSciences is currently looking forward to investment opportunities in the Asian market in order to grow its business much faster than the United States. In line with this, the company is preparing to roll out several products in China and Japan. Turning to Europe, management feels encouraged about the growth potential of this region with the Tissue Technologies business and CUSA Clarity product slated to be launched in Europe.
On the flip side, there are some factors which have been deterring the stock’s rally, of late.
Codman business sluggish: During the last reported quarter, Integra’s Codman Specialty Surgical segment delivered dull numbers. The quarter’s performance was majorly affected by the company’s exit from certain transition services agreements covering Western Europe.
Natural calamities might hamper business process: Many of Integra LifeSciences’ manufacturing, development or research facilities are vulnerable to natural disasters or unwanted events, which depending on the extent of its severity, might force the company to cease development and manufacturing of some or all of its products.
Foreign exchange woes stay:Integra LifeSciences generates significant revenues outside the United States. As a result, currency fluctuations between the U.S. dollar and the currencies in which those customers conduct business may have an impact on the demand for the company's products in foreign countries.
Due to these negative factors, over the past three months, the company’s share price has underperformed its industry. The stock has lost 11.1% compared with the industry’s 6.8% decrease and the S&P 500’s 1.9% rise.
Which Way Are Estimates Heading?
For the current quarter, the Zacks Consensus Estimate for earnings is pegged at $0.65, reflecting 8.3% growth. The same for revenues stands at $373.6 million, mirroring a year-over-year improvement of 2.1%.
For 2019, the Zacks Consensus Estimate for earnings is pinned at $2.70, reflecting 11.6% year-over-year growth. The same for revenues is pegged at $1.52 billion, mirroring 3.2% growth.
A few better-ranked stocks in the broader medical space are Masimo Corporation MASI, CONMED CNMD, DENTSPLY SIRONA XRAY, each currently carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masimo’s long-term earnings growth rate is projected at 16.1%
CONMED’s long-term earnings growth rate is expected at 13.3%.
DENTSPLY SIRONA’s long-term earnings growth rate is predicted at 11.5%.
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