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Mazor Projects Higher Q3 Revenues, Clinches Mazor X Orders


Developer of robotic technology and products Mazor Robotics Ltd MZOR, recently announced that it expects to report third-quarter 2017 revenues of approximately $17.2 million compared with $8 million in the year-ago quarter. The bullishness comes from strength in Mazor X system sales and increased procedure volumes.

Stock Performance

Lately, the price performance of the Israel-based company has been encouraging. In the last three months, the stock has returned 28.9%, outperforming the industry’s gain of roughly 3.0%. The stock’s current return was higher than the S&P 500’s return of 4.1% over the same time frame.

Despite the bullish price trend, estimate revision for the stock has been quite disappointing. The full year saw two estimates moving south in the last two months, compared with no movement in the opposite direction. As a result, the estimate contracted to a loss of 86 cents per share from a loss of 88 cents during the aforementioned period.

Factors Behind Mazor X Strength

During the third quarter, the company received purchase orders for 19 Mazor X systems in the United States. In addition, Mazor received purchase orders for three Renaissance systems for the Chinese market.

Mazor X is a transformative guidance system for simplifying spine surgeries with advanced features and "sophisticated integrative abilities." Strong demand for Mazor X systems during the third quarter reached backlog to 17 since its introduction in the second half of 2016. The company is slated to report financial results for the third quarter ended Sep 30, in November.

Bottom Line

We are hopeful about the encouraging global spine surgery market. A research report by Markets And Markets suggests that the niche markets are estimated to reach $17.27 billion by 2021, at a CAGR of 5.3%.

In fact, the increasing utilization rate of Mazor X is quite compelling for the company. We believe that the commercialization cycle of the Mazor X platform is progressing per plans with a growing customer base.

Zacks Rank & Other Key Picks

Currently, Mazor has a Zacks Rank #1 (Strong Buy). A few other top-ranked stocks in the broader medical sector are Abbott ABT, IDEXX Laboratories, Inc IDXX and Thermo Fisher Scientific Inc TMO. Abbott, IDEXX Laboratories and Thermo Fisher carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Abbott has a long-term expected earnings growth rate of 10.7%. The stock has rallied roughly 35.2% over last year.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained 40.8% last year.

Thermo Fisher has a long-term expected earnings growth rate of 11.7%. The stock has gained 25.3% last year.

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