Reasons to Retain Inari Medical Stock in Your Portfolio for Now

Inari Medical, Inc. NARI is well-poised for growth on the back of a huge market opportunity for its products and its commitment to understanding the venous system. However, the company’s dependency on the adoption of its products is concerning.Shares of this Zacks Rank #3 (Hold) company have lost 18.1% in the past six months against the industry’s 6.8% growth. The S&P 500 Index has risen 26.2% in the same time frame.NARI, with a market capitalization of $2.99 billion, is a commercial-stage medical device company. It seeks to develop products for treating and changing the lives of patients suffering from venous diseases.The company’s negative earnings yield of 0.1% compares favorably with the industry’s (-3.8%). It delivered a trailing four-quarter average earnings surprise of 24.77%.Image Source: Zacks Investment ResearchWhat’s Driving NARI’s Performance?Inari Medical’s top-line growth is primarily driven by its ClotTriever and FlowTriever products that target patients with venous thromboembolism (VTE) (with significant growth opportunities going forward). The considerable growth prospects for Inari’s VTE products should help drive the company’s revenues. Currently, conservative medical management with anticoagulants is the standard of care for VTE.However, new therapies like ClotTriever and FlowTriever products are demonstrating rising adoption as they lead to lower treatment-related risks. Inari focuses on establishing its treatments as the standard of care for VTE, whichis significantly underpenetrated.According to Inari Medical’s estimate, there are 1.9 million people with VTE in the United States each year, with 1 million diagnosed with DVT and 900,000 with PE. Among this patient population, around 430,000 DVT and 280,000 PE patients in the United States every year could benefit from treatment through ClotTriever and FlowTriever products, respectively.During the reported quarter, NARI witnessed growth in revenues from its global VTE business on the back of commercial expansion and market development. The global VTE revenues totaled $145.3 million, up 19.7% year over year. The company expects robust growth to continue for this business on the back of the strong adoption of mechanical thrombectomy in the upcoming years as NARI leads in the significantly underpenetrated VTE market in the United States. The company continues to evaluate patient outcomes using its VTE products like FlowTriever and ClotTriever to establish them as the standard of care.NARI’s commercial expansion and market development plans have been driving the global VTE business, its major revenue generator. Moreover, rising demand for emerging therapies like RevCore should bring in additional revenues in the upcoming quarters, thereby boosting top-line growth. The company is currently engaged in the limited market release of Venacore, the second purpose-built tool within the CBD toolkit, expanding NARI’s emerging therapies category.Emerging therapies saw robust growth as well. The company is currently progressing well with the limited market release of the LimFlow system in the United States. Beginning October 2024, the LimFlow procedures are reimbursed through NTAP, which should allow higher reimbursements. This is expected to lead to increased adoption when NARI starts the full commercial release of the system in 2025.NARI expects to start treating patients in China and Japan soon and is currently finalizing its go-to-market strategy for both regions. The company gained regulatory approval in Japan for ClotTriever during the third quarter, followed by a reimbursement approval last month. NARI also entered into a joint venture with 6 Dimensions Capital last month to provide access to Inari’s innovative technology for patients with significant unmet needs in Greater China. Due to unmet needs, management expects its international business to represent more than 20% of total revenues in the future.What’s Weighing on the Stock?Although ClotTriever and FlowTriever have attractive reimbursement coverages, these are determined by government agencies, private insurers and other payors for a particular procedure, irrespective of the devices used. Meanwhile, third-party payors are increasingly limiting coverage and reducing reimbursements for medical products and services.In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursements. Any unfavorable change in coverage for Inari Medical’s products will likely hurt their adoption, affecting top-line growth. Moreover, expansion in international markets is a greater risk as several countries are unlikely to have extensive reimbursement coverage, which may adversely impact adoption.Inari Medical is currently facing a civil investigative demand from the U.S. Department of Justice, Civil Division, in connection with an investigation under the federal Anti-Kickback Statute and Civil False Claims Act. According to the department, NARI might have been involved in influencing healthcare professionals to prescribe its products. Any unfavorable ruling should be a setback for the company that may lead to lower demand for its products, hurting sales growth.Estimate TrendThe Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $710.4 million, indicating a 17.8% increase from the previous year’s reported number. The bottom-line estimate is pinned at a loss of 4 cents, implying a 94.5% improvement from that recorded a year ago. Loss per share estimates have narrowed 33.3% in the past 60 days.Inari Medical, Inc. Price Inari Medical, Inc. price | Inari Medical, Inc. QuoteKey PicksSome better-ranked stocks in the broader medical space are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 10.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 11.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Cardinal Health’s shares have gained 14.5% compared with the industry’s 1.5% growth in the past year.ResMed, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.ResMed has gained 39.8% compared with the industry’s 12.7% growth in the past year.Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.Boston Scientific’s shares have rallied 62.2% compared with the industry’s 12.7% growth in the past year.Want 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 Boston Scientific Corporation (BSX): Free Stock Analysis Report Cardinal Health, Inc. (CAH): Free Stock Analysis Report ResMed Inc. (RMD): Free Stock Analysis Report Inari Medical, Inc. (NARI): 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