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RTI Surgical: A Strong Buy on Q2 Results, Raised 2015 View

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On Sep 30, Zacks Investment Research upgraded RTI Surgical Inc. RTIX to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Impressive second-quarter 2015 results, encouraging guidance revision, product launches and an innovative product pipeline are the primary factors that drove the upgrade. We note that on an average RTI Surgical has outperformed the Zacks Consensus Estimate by almost 41.7% in the last four quarters.

Moreover, the company's share price gained 5.2% year-to-date compared with -8.5% for the S&P 500.

In the last reported quarter, RTI Surgical reported earnings of 5 cents per share, which beat the Zacks Consensus Estimate by a penny and surged 66.7% from the year-ago quarter. Moreover, revenues jumped 10% year over year (at constant currency) to $71.6 million.

Taking the impressive results into consideration, RTI Surgical raised the lower end of its full-year 2015 guidance. Revenues are now expected in the range of $282 million to $286 million. Meanwhile, earnings are forecasted in the band of 20 cents to 23 cents per share. RTI Surgical expects operating margin to approach 10% by the end of fiscal 2015.

We expect strong results from sports, BGS & general orthopedic, dental and orthofixation to drive top-line growth in fiscal 2015. Moreover, a growing consumer base in the spine business, a diversified product portfolio and stringent cost control are some of the key catalysts.

Estimate Revisions

The respective Zacks Consensus Estimate for fiscal 2015 and 2016 remained steady at 21 cents and 27 cents per share, respectively, over the last 7 days.

Other Stocks to Consider

One may also consider other favorably ranked players in the industry like Abiomed ABMD , Masimo MASI and Thoratec THOR . All the three stocks carry the same Zacks Rank as RTI Surgical.

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THORATEC CORP (THOR): Free Stock Analysis Report

ABIOMED INC (ABMD): Free Stock Analysis Report

MASIMO CORP (MASI): Free Stock Analysis Report

RTI SURGICAL (RTIX): Free Stock Analysis Report

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Zacks Investment Research

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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