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Here's Why You Should Invest in 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 13.3%, against the industry’s decline of 6% on a year-to-date basis. Meanwhile, the S&P 500 Index fell 8.3% in the same timeframe.

Integer Holdings, with a market capitalization of $2.99 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 15.1%, on average.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #1 (Strong 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.

The company plans to invest more in the areas of Cardio & Vascular, Neuromodulation, and Electrochem to accelerate sales and market penetration. Integer Holdings has also been enhancing profitability in the areas of Advanced Surgical, Orthopedics, and Power Solutions through focused sales growth and cost structure initiatives.

Further, the company continues to gain from strong presence in the broader MedTech space. This, in turn, will help in driving the company’s overall performance.

Moreover, the company has been exhibiting improvement in Non-Medical sales and witnessed growth in fourth-quarter 2019 primarily on the back of higher military market demand and growth in the energy market. We expect the momentum to sustain in the near term.

Additionally, an upbeat outlook for 2020 and expansion in operating margin instill optimism in the stock.

Notably, for 2020, adjusted earnings are expected in the range of $5.10-$5.30, indicating an improvement of 9-13% from the previous year.

For 2020, Integer Holdings continues to anticipate revenues between $1.29 billion and $1.31 billion. On an adjusted basis, the company expects revenues in the same band, indicating an improvement of 3-4% from the previous year.

Which Way are Estimates Headed?

For 2020, the Zacks Consensus Estimate for revenues is pegged at $1.30 billion, indicating an improvement of 3.3% from the year-ago quarter. The same for earnings stands at $5.20, suggesting growth of 11.1% from the year-ago reported figure.

Other Stocks to Consider

Some other top-ranked stocks from the broader medical space include Accuray Incorporated ARAY, West Pharmaceutical Services, Inc. WST and DexCom, Inc. DXCM, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Accuray has an expected earnings growth rate for the next quarter of 200%.

West Pharmaceutical has an estimated earnings growth rate for the next quarter of 3.4%.

DexCom has a projected long-term earnings growth rate of 36.7%.

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