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Haemonetics (HAE) Hits a 52-Week High: What’s Driving It?


On Feb 7, shares of Haemonetics Corporation HAE reached a new 52-week high of $70.89, closing the session marginally lower at $69.73. The stock hit the high following impressive third-quarter fiscal 2018 earnings results, the day before.

Haemonetics had a great run on the bourses in the past year. The stock has returned 86.5% compared with the S&P 500 index’s gain of 16.6%. The return is also higher than the broader industry's rally of 17.2%.

Considering this, one may expect the Massachusetts-based blood management company to scale new highs in the upcoming quarters. Further, the company delivered average positive earnings surprise of 17.5% in the trailing four quarters. A positive growth rate of 12.4% for the next year also instills optimism.

Estimate revision trends for the current year look impressive. In the last two months, one estimate has moved north, with no movement in the opposite direction.

Factors Driving Haemonetics

Let’s take a look at the possible growth propellers.

Surging Segmental Revenues: Plasma revenues in the quarter were up 4% on a year-over-year basis. The upside was driven by strong performance in disposables and software, particularly in the United States. Additionally, Hospital Business revenues grew 6%, on the back of consistent results in North America and improved international results in key markets.

Expanding Margins: In the last quarter, gross margin expanded 310 basis points (bps) to 47.6% on a year-over-year basis. Meanwhile, operating margin expanded 270 bps to 17.9% on a year-over-year basis.

NexSys PCS: Market seems to be upbeat about Haemonetics’ recently-introduced new platform — NexSys Plasma Collection System (PCS). The device is designed to increase overall plasma yield per donor, through planned embedded software upgrades.

The device has recently received FDA clearance, with a CE Mark expected in spring. The management also expects a 510 (k) submission for the embedded software and firmware, through which the NexSys PCS functions.

EPS Guidance Raised: Haemonetics raised 2018 guidance for earnings, which is estimated in the range of $1.80-$1.90 per share compared with the previous range of $1.65-$1.75. The raised guidance indicates that the overall bullishness will continue.

Zacks Rank & Stocks to Consider

Haemonetics carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space are athenahealth ATHN, HCA Healthcare HCA and Neogen NEOG. Each of the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank Stocks Here.

athenahealth has a long-term projected growth rate of 23.1%. The stock has gained 7.8% compared with the industry’s rally in the last three months.

HCA Healthcare has a long-term projected growth rate of 11.5%. In the last six months, the stock has returned 26.2%.

Neogen has a long-term projected growth rate of 15%. In the last six months, the stock has returned 10.1%.

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