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Integra LifeSciences at 52-Week High on Deals, View Update

Zacks

Shares of Integra LifeSciences Holdings Corporation IART, a global leader in medical technology, scaled a new 52-week high of $45.50 on Jan 10, closing a tad lower at $44.90.

An expected earnings growth rate of 11.3% indicates the stock’s potential for further appreciation in the near future.

Favorable Stock Performance

A glimpse at Integra’s share price movement reveals a stupendous one-year return of approximately 39.4%, way better than the Zacks classified Medical-Biomed/ Genetics sub-industry’s decline of roughly 13.5% over the same timeframe.


While the company’s current earnings yield is 4.2%, far better than the industry average of -17.2%, its projected sales growth for the current year stands at 7.6%.

Integra registered positive earnings surprises in the last four quarters, the average being 3.6%.

Meanwhile, the stock carries a Zacks Rank #3 (Hold) and has a remarkable market cap of $3.34 billion.

Estimate Revisions

The current estimate revision trend for the stock is pretty favorable for the full year with one estimate going north in the past seven days, compared to no movement in the opposite direction. Notably, the full-year estimates are pegged at $1.75 per share at the moment.

Growth Catalysts

Of the recent developments, Integra has signed a definitive agreement to take over Derma Sciences Inc. DSCI for $7.00 per share. Per management, Derma Sciences has strengthened Integra’s regenerative technology capabilities by adding its amniotic tissue-based product line to Integra’s portfolio.

Notably, the transaction is expected to close by the first quarter of 2017. Meanwhile, Derma Sciences has a Zacks Rank #3 (Hold) and has a projected sales growth of 19.7% for the current year.

Meanwhile, Integra recently provided an update on the fourth quarter and full-year guidance.

The company forecasts fourth quarter and full-year 2016 revenues of $256 million and $992 million, respectively. Notably, these figures are at the lower end of the previously provided guidance.

Coming to organic growth prospects of the stock, excluding the impact of foreign currency changes, Integra expects 7% growth for the fourth quarter. However, for the full year, organic revenues are expected to multiply at a rate of 9%.

Meanwhile, Integra expects full-year 2017 organic revenue in the range of $1.05 billion to $1.07 billion, multiplying at the rate of 7% to 8.5%. The company projects full-year 2017 adjusted earnings in the band of $1.91 to $1.97 per share, growing at low double digits on a year-over-year basis.

Stocks to Consider

Better-ranked stocks in the broader medical sector include Glaukos Corporation GKOS and Penumbra Inc. PEN. Notably, Glaukos Corporation and Penumbra sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 52.1%.

Penumbra has a long-term expected earnings growth rate of 20%. Notably, the stock represents an impressive one-year return of almost 29.7%.

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