Reasons to Retain IART Stock in Your Portfolio for Now

Integra LifeSciences Holdings Corporation’s IART growth in the third quarter is driven by sales growth within its Codman Specialty Surgical (“CSS”) arm despite ongoing supply challenges and temporary shipping holds. The company’s strong focus on portfolio optimization is encouraging. Meanwhile, headwinds such as a dull macro environment and weak liquidity position pose concerns for Integra’s operations.In the past year, this Zacks Rank #3 (Hold) company’s shares have lost 39.1% against the industry’s 14.7% growth and the  S&P 500 composite’s 31.4% increase.The renowned medical device company has a market capitalization of $1.82 billion. In the last quarter, the company delivered an earnings surprise of 5.13%.Let’s delve deeper.Integra’s Key TailwindsStrong Prospects in CSS: Integra sees healthy demand for its industry-leading products within the CSS segment. Further, the integration synergy from the Acclarent business has been quite strong, outperforming the company’s expectations. According to the company, the acquisition will position Integra as a leader in the ENT segments, expand addressable markets, and provide immediate scale and accretive growth to the CSS portfolio.In the third quarter of 2024, despite the ongoing supply challenges in Dural access and repair and the temporary shipping holds in CSS management and neuro-monitoring, Integra registered significant demand for its neurosurgery products. The company saw high single-digit growth in specialty surgical instruments and significant reported as well as organic growth in the ENT business. Integra also registered strong growth from the CereLink relaunch, CUSA Clarity and Mayfield Capital.Strong Focus on Portfolio Optimization:  Integra reshaped its portfolio with the ACell acquisition. The company has expressed confidence in ACell’s potential for robust long-term growth. In the third quarter, Integra capital sales were up in the low double-digits, driven by the global relaunch of CereLink monitors, which has delivered results that are in line with the company’s expectations. Earlier in 2024, the company commercially launched its MicroMatrix Flex in the United States.Integra’s spree of innovation and portfolio strengthening process requires a major thrust on R&D. In recent years, the company has gradually ramped up its investment in R&D. In the third quarter, Integra’s R&D expenses increased 3.2%.Integra’s Key HeadwindsTough Liquidity Position: With total debt (including the current portion) of $1.81 billion as of Sept. 30, 2024, Integra’s position looks quite tight from the liquidity point of view. The company’s cash and cash equivalents were $278 million at the end of the third quarter of 2024. The quarter’s total debt was much higher than the corresponding cash and cash equivalent level. Further, the company has $602 million of short-term payable debt on its balance sheet, which is also much higher than its current cash in hand.  Image Source: Zacks Investment ResearchChoppy Macro Environment: The challenging macroeconomic scenario, specifically in the Asia Pacific and Europe, is driving the higher-than-anticipated rise in raw materials and labor costs. Higher freight costs, ongoing labor inflation and manufacturing and supply-chain inefficiencies continued to put significant pressure on Integra’s margins recently. In the third quarter of 2024, selling, general and administrative expenses increased 9.4% year over year. Additionally, gross margins were impacted by nearly 452 basis points due to higher manufacturing inefficiencies, including scrap, along with unfavorable revenue mix, such as lower skin revenue.IART’s Estimate TrendThe Zacks Consensus Estimate for 2024 earnings per share has remained constant at $2.45 in the past 30 days.The consensus estimate for the company’s 2024 revenues is pegged at $1.61 billion, which indicates a 4.6% increase from the year-ago reported number.Key PicksSome better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and Penumbra PEN.Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 3.6% compared with the industry’s 19.9% growth in the past year.HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Globus Medical, carrying a Zacks Rank #2 at present, has a long-term estimated growth rate of 14.1%. Shares of the company have rallied 81.8% compared with the industry’s 14.5% growth. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.65%.Penumbra, carrying a Zacks Rank #2 at present, has an estimated 2024 earnings growth rate of 33.5% compared with the industry’s 15.9%. Shares of Penumbra have risen 3.2% compared with the industry’s 14.5% growth over the past year. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 10.54%.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Integra LifeSciences Holdings Corporation (IART): Free Stock Analysis Report Haemonetics Corporation (HAE): Free Stock Analysis Report Globus Medical, Inc. (GMED): Free Stock Analysis Report Penumbra, Inc. (PEN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks