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NuVasive at 52-Week High on Preliminary Results, MHLW Nod

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Share price of San Diego, CA-based NuVasive, Inc.NUVA scaled a new 52-week high of $71.03 on Jan 11, finally closing a tad lower at $70.7. The stock rallied 41.2% over the past one year, way ahead of the S&P 500's 19.3%. The company presently has a market cap of $3.56 billion.

In the majority of the last six months, NuVasive has outshined the Zacks categorized Medical-Products Industry with respect to share price movement. The stock has climbed 15.9%, way higher than the broader industry's decline of only 6.5%.

Additionally, NuVasive's long-term growth fundamentals are compelling. The Zacks Rank #3 (Hold) company recorded a five-year CAGR revenue of 10.7% and had a long-term earnings growth rate of 16.6% in the past five years compared to the industry's average of 16.6%.

NuVasive also has a trailing four-quarter average positive earnings surprise of 10.9%. While we wait for its fourth-quarter results, slated for release on Feb 9, its third-quarter's adjusted earnings per share of $0.40 reflected a 14.3% rise from the year-ago quarter.

NuVasive, Inc. Price and Consensus

NuVasive, Inc. Price and Consensus | NuVasive, Inc. Quote

Growth Catalysts

The latest 52-week high came on the back of its recently announced preliminary results for full-year 2016. Management released better-than-expected preliminary numbers, displaying strength across all geographies. NuVasive anticipates full-year 2016 revenues at around $956 million, reflecting 17.9% year-over-year growth. The current Zacks Consensus Estimate for revenue is $953.1 million, below the company's preliminary figure.

Also, adjusted operating profit margin is likely to be in line with the previous guidance of 16.0% for the full year 2016.

Additionally, management expects full-year 2017 revenues at approximately $1.065 billion, reflecting 11.4% year-over-year growth. NuVasive's commitment to long-term financial goals and strategic initiatives to drive revenue growth raises investor's confidence in the stock.

Another recent development is the company's receipt of approval from the Japanese Ministry of Health, Labour and Welfare (MHLW) for instruments used in the eXtreme Lateral Interbody Fusion (XLIF) procedure. The move was a welcome one as NuVasive can now resume XLIF procedures in Japan. We expect the MHLW approval to reflect positively in the company's forthcoming quarterly reports and fortify its position in the Japanese medical device market.

Meanwhile, NuVasive is leaving no stone unturned to gain traction in the fast growing spine market. The company currently has huge prospects in the spine business. Reportedly, the segment saw double-digit growth in the past quarter and has seen continued strength through the entire first half of 2016. Further, NuVasive recently included NSO and Biotronic NeuroNetwork are expected to strengthen its foothold in the spine market.

Key Picks

Better - ranked medical stocks include Penumbra, Inc. PEN , Neogen Corporation NEOG and Conatus Pharmaceuticals Inc. CNAT . Penumbra sports a Zacks Rank #1 (Strong Buy) while Neogen and Conatus carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Penumbra gained 32.8% over the last one year compared to the S&P 500's 20.4%. The company has an impressive four-quarter average earnings surprise of over 100%.

Neogen gained 27% in the past one year, way better than the S&P 500. The stock has an impressive long-term earnings growth of 16.7% for the next five years compared to the industry average of 15.2%.

Conatus rallied 200.6%, way higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 12.5%.

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NuVasive, Inc. (NUVA): Free Stock Analysis Report

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Conatus Pharmaceuticals Inc. (CNAT): 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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