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Haemonetics Rides on Solid Plasma, Slows Blood Center Growth


On Jun 13, we issued an updated research report on Haemonetics Corporation HAE, a Braintree, MA-based leading provider of blood management solutions to customers encompassing blood and plasma collectors, hospitals and health care providers globally.

For the past three months, Haemonetics has been trading above the Zacks categorized Medical – Products industry. While the company exited fiscal 2017 with earnings and revenues beating the respective Zacks Consensus Estimate, we expect this trend to continue in the upcoming quarters as well.

Haemonetics Corporation Price

Haemonetics Corporation Price | Haemonetics Corporation Quote

The market is also encouraged by Haemonetics’ consistent growth in both Plasma and Haemonetics Management franchises. The stock till now has gained 7.3% compared with the broader industry’s gain of 6.9%.

Haemonetics has been witnessing strong growth in Plasma franchise for quite some time now. Management has maintained a high confidence in the continued growth of commercial plasma collection business.

Of late, management declared that its NextGen plasma collection software has been seeing a strong customer interest. Management’s 2018 guidance for Plasma revenue growth is 3-5% inclusive of the divestiture of SEBRA bench-top and handheld sealers, representing 1.4% of annual Plasma revenue in the fourth quarter of 2017.

The company’s Hospital business is also progressing well. The TEG line of products has gained popularity worldwide. The TEG 5000 is approved for a broad set of indications in all its top markets. The TEG 6s and TEG Manager are approved for the same set of indications in Europe, Australia and Japan.

In the U.S., TEG 6s is to be used for cardiovascular surgery and the company is presently pursuing a broader set of indications, beginning with trauma.

On the flip side, the company has been witnessing sluggish revenue growth at the Blood center franchise. This has significantly affected Haemonetics’ results over the past few quarters. Management also doesn’t expect any early recovery in the Blood center's results.

Macroeconomic uncertainty continues to pose a challenge for Haemonetics. Management also anticipates slower-than-expected product adoption by customers to reduce revenues and profits. Further, currency fluctuations and stiff competition continue to hamper the stock.

Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank #3 (Hold). Few better-ranked medical stocks are Align Technology, Inc. ALGN, Inogen, Inc. INGN and Accelerate Diagnostics, Inc. AXDX. Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 30.9% over the last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of around 88%.

Accelerate Diagnostics has an expected long-term adjusted earnings growth rate of 30%. The stock has roughly added 20% over the last three months.

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