Merit Medical Up to Strong Buy on Impressive Q3 Performance - Analyst Blog

On Nov 13, Zacks Investment Research upgraded Merit Medical Systems, Inc. ( MMSI ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Merit Medical's strong third-quarter 2014 results were the primary reason behind the upgrade. Following the earnings release on Oct 23, shares of Merit Medical climbed around 15.6% on the same day, reflecting investors' confidence in the company.

Adjusted earnings of 25 cents per share steered past the Zacks Consensus Estimate of 16 cents, though it remained flat on a year-over-year basis. Revenues increased 12% year over year to $129 million and were in line with the Zacks Consensus Estimate.

Revenue growth was driven by strength across all product lines as well as strong performance in the international markets. Meanwhile, Embolics continues to remain a good growth driver for the company. Higher production volumes and a favorable product mix also led to gross margin improvement in the quarter.

Merit Medical's impressive third-quarter results have set a positive trend in earnings estimate revisions. For 2014, two estimates moved north in the past one month with no negative revision, causing the Zacks Consensus Estimate to move up 12.9% to its current level of 70 cents.

Moreover, the long-term expected earnings growth rate for the company stands higher at 14% compared with industry growth of 13.5%.

Other Stocks to Consider

Other well-performing stocks include AmerisourceBergen Corporation ( ABC ) and Steris Corp. ( STE ) in the medical/dental supply industry and ICU Medical ( ICUI ) in the medical products industry. While ICU Medical sports a Zacks Rank #1 (Strong Buy), both AmerisourceBergen and Steris carry a Zacks Rank #2 (Buy).

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ICU MEDICAL INC (ICUI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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