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Here's Why You Should Bet on Integer Holdings Stock Now

Zacks Equity Research

Integer Holdings Corporation ITGR is well poised for growth on portfolio management, strong presence in the broader MedTech space and improving Non-Medical sales.

Shares of Integer Holdings have gained 5.8%, against the industry’s decline of 0.8% on a month-to-date basis. Meanwhile, the S&P 500 Index grew 0.9% in the same timeframe.

Integer Holdings, with a market capitalization of $2.6 billion, manufactures and develops medical devices and components primarily for original equipment manufacturers (OEMs), which depend on the company to design, develop and produce intellectual property protected medical device technologies. Moreover, it has surpassed the Zacks Consensus Estimate in the trailing four quarters by 16.8%, on average.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).




What’s Favoring the Stock?

Integer Holdings has introduced a new approach to drive sales and profitable growth, following a comprehensive strategic review of the 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.

On the basis of 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 the company has been witnessing revenue growth faster than markets and profits twice the rate of revenue growth.
Further, the company continues to gain from strong presence in the broader MedTech space. This, in turn, will help in accelerating the company’s overall performance.

Moreover, the company has been exhibiting improvement in Non-Medical sales and anticipates to witness growth in the fourth quarter of 2019 primarily on the back of increased military and environmental demand despite the weakness in the energy market.

Additionally, an upbeat outlook for 2019 and expansion in operating margin instill optimism in the stock.

Notably, for 2019, adjusted earnings are expected in the range of $4.55-$4.65 (up from the previously guided range of $4.25-$4.45 per share), indicating an improvement of 20-22% from the previous year.

For 2019, Integer Holdings continues to anticipate revenues between $1.27 billion and $1.28 billion. On an adjusted basis, the company expects revenues in the same band, indicating an improvement of 4-5.5% from the previous year.

For fourth-quarter 2019, the company projects adjusted earnings per share in the range of $1.13-$1.23, suggesting growth of 9-18% from the prior-year quarter. Further, revenues are estimated to range between $333 million and $348 million for the same timeframe, indicating an improvement of 10-15% from the year-ago quarter.

Which Way are Estimates Headed?

For 2019, the Zacks Consensus Estimate for revenues is pegged at $1.25 billion, indicating a decline of 3.9% from the year-ago quarter. The same for earnings stands at $4.60, suggesting growth of 21.1% from the year-ago reported figure.

Other Stocks to Consider

Some other top-ranked stocks from the broader medical space are Conmed Corporation CNMD, West Pharmaceutical Services, Inc. WST and Edwards Lifesciences Corporation EW, each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conmed has a long-term earnings growth rate of 17%.

West Pharmaceutical has a long-term earnings growth rate of 14%.

Edwards Lifesciences has a long-term earnings growth rate of 14.8%.

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Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
 
Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
 
West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report
 
CONMED Corporation (CNMD) : Free Stock Analysis Report
 
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Zacks Investment Research