The medical equipment industry has been capitalizing on technological innovation and increased investments from the public and private sectors. Medical device manufacturers are adopting digital trends to improve their operational efficiency at lower costs, thereby providing greater value to customers.
According to a report by Grand View Research, the U.S. medical device manufacturers market is projected to reach $262.40 billion by 2028, growing at a 5% CAGR. The increasing prevalence of chronic diseases and a growing, elderly population are the main market drivers.
Given this backdrop, quality medical instrument stocks Teleflex Incorporated (TFX) and Merit Medical Systems, Inc. (MMSI) have garnered substantial investor attention. These stocks have gained momentum over the past month, outperforming the benchmark S&P 500 index’s 5.3% decline over this period. So, we think these stocks could be worth watching now.
Click here to checkout our Healthcare Sector Report for 2022
Teleflex Incorporated (TFX)
TFX in Wayne, Pa., provides medical technology products worldwide. It designs, develops, manufactures, and sells single-use medical devices for diagnostic and therapeutic procedures in critical care and surgical applications. The company operates in four segments: Americas; Europe, Middle East, and Africa (EMEA); Asia (Asia Pacific); and Original Equipment Manufacturer and Development Services (OEM).
Last month, TFX received U.S. Food and Drug Administration (FDA) clearance for specialty catheters and coronary guidewire use in Chronic Total Occlusion Percutaneous Coronary Interventions (CTO PCI) procedures.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, TFX's net revenues increased 7.1% year-over-year to $761.91 million. TFX's gross profit rose 9.4% year-over-year to $419.73 million. The company’s net income has grown 68.2% year-over-year to $128.08 million. TFX’s net income per share increased 67.7% year-over-year to $2.70.
The $2.90 billion consensus revenue estimate for its fiscal year 2022, ending Dec. 31, 2022, represents 3.2% year-over-year growth. The $14 consensus EPS estimate for its fiscal year 2022 indicates 5% year-over-year growth. Also, the company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all trailing four quarters.
Shares of TFX gained 7.7% in price over the past month and 15.1% over the three months to close yesterday’s trading session at $333.24.
Merit Medical Systems, Inc. (MMSI)
MMSI in South Jordan, Utah, designs, manufactures, markets, and sells disposable medical devices for diagnostic and therapeutic procedures in cardiology, oncology, radiology, critical care, and endoscopy. The company operates in two segments: Cardiovascular; and Endoscopy. It provides peripheral intervention products, cardiac intervention products, custom procedural solutions, pulmonary products, and gastroenterology products.
On August 17, 2021, MMSI launched the One-Vac Evacuated Drainage Bottle for aspirating, removing, or sampling percutaneous fluids. With this product launch, MMSI might expand the company’s drainage portfolio, extend its consumer base, and boost revenues.
MMSI's net sales increased 7.9% year-over-year to $278.49 million in its fiscal year 2021 fourth quarter, ended Dec. 31, 2021. The company's gross profit rose 15.9% year-over-year to $128.81 million. MMSI’s operating income increased 19.4% from its year-ago value to $48.36 million. MMSI's net income has grown 32.6% year-over-year to $40.78 million. And the company’s earnings per share increased 31.5% year-over-year to $0.71.
Analysts expect MMSI's revenue for its fiscal 2022 first quarter ending March 2022 to come in at $264.32 million, representing a 6.2% rise year-over-year. The company has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in each of all trailing four quarters.
The stock gained 4.5% year-to-date and 16.6% over the past month, respectively. MMSI closed yesterday's trading session at $65.11.
Click here to checkout our Healthcare Sector Report for 2022
TFX shares were trading at $341.13 per share on Wednesday afternoon, up $7.89 (+2.37%). Year-to-date, TFX has gained 3.85%, versus a -7.63% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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