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Hill-Rom (HRC) at 52-Week High: What’s Driving the Stock?


Share price of Batesville, IN-based Hill-Rom Holdings, Inc. HRC scaled a new 52-week high of $84.17 on Jul 14. The stock has a market cap of $5.54 billion. The company’s five-year historical growth rate is also favorable at 10.0%, as compared with 2.8% of the S&P 500 index and 3.4% of the broader industry.

Comparison with Broader Industry

The company has gained 20.1%, much better than the S&P 500’s gain of 5.2% and Zacks categorized Medical – Products industry’s gain of 11.5% over the last three months.

Earnings Surprise and Estimate Revision Trend

This Zacks Rank #3 (Hold) company posted a positive earnings surprise of 11.4% in the last quarter leading to a four-quarter average earnings beat of 5.6%. Also, Hill-Rom’s current year estimate revision trend is promising. In the past 30 days, one estimate went up with no downward revision for the current year. The magnitude of the estimate has improved by 0.3% to $3.86 over the same period.

Growth Catalysts

The market is upbeat about Hill Rom’s strategic plans to divest its non-profitable Volker business to focus more on its core operations. Hill-Rom recently entered into an agreement to divest its Volker business to an affiliate of CoBe Capital. The Volker business primarily serves the European long-term care bed market.

We are also encouraged to note that Hill-Rom continues to grow strongly on its strategy of product expansion and diversification. The company recently unveiled Hill-Rom Envella Air Fluidized Therapy Bed, the latest innovative solution providing the highest-quality care for patients with advanced wounds.

Also, the company launched Hill-Rom 900 Accella bed system for higher acuity patients in intensive and acute care settings.

Apart from this, management announced the introduction of Monarch Airway Clearance System, which represents Hill-Rom's debut in mobile therapy and the next chapter in the company's patient-centered respiratory care solutions. This is a major breakthrough for the company in the digital health space.

Hill Rom’s raised full-year adjusted earnings guidance has also bolstered investors’ confidence in the stock.

Key Picks

A few better-ranked medical stocks are Mesa Laboratories, Inc. MLAB, INSYS Therapeutics, Inc. INSY and Align Technology, Inc. ALGN. Notably, Mesa Laboratories and INSYS Therapeutics sport a Zacks Rank #1 (Strong Buy), while Align Technology carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mesa Laboratories has a positive earnings surprise of 2.84% for the last four quarters. The stock has added roughly 8.8% over the last three months.

INSYS Therapeutics has a long-term expected earnings growth rate of 20%. The stock has gained around 16.5% over the last three months.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 32.7% over the last three months.

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