Medtech Firm Enovis Sets Strong 2024 Targets As Q4 Earnings Beat Expectations, Analyst Says Growth Intact

Enovis Corporation’s ENOV fourth-quarter net sales reached $455 million, up 11% Y/Y, including 8% organic growth, beating the consensus of $445.36 million.

Fourth quarter results reflect continued execution in P&R, above-market growth in Recon, and the impact of recent acquisitions. 

Compared to the same quarter in 2022, net sales in Recon grew 18%, with 11% organic sales growth, and P&R grew 8%, with 6% organic sales growth.

Also Read: This Analyst Sees Durable Share Gains, Margin Expansion For Orthopedics-Focused Enovis.

Enovis reported a fourth-quarter net income from continuing operations of $3 million and an adjusted EBITDA of $82 million, or 18% of sales, a decline of 30 basis points versus the comparable prior year quarter, which includes the temporary dilution of recent acquisitions.

The company reported adjusted earnings per diluted share of $0.79, beating the consensus of $0.74.

“We are very pleased with our results in 2023, with both revenues and operating margins exceeding expectations while continuing to make investments in key growth initiatives and M&A,” said Matt Trerotola, Chief Executive Officer of Enovis. “We look forward to carrying this momentum into 2024, which is setting up to be a transformative year as we integrate Lima and kick off a multi-year cadence of new product introductions across Recon and P&R.”

Guidance: Enovis forecasts fiscal year 2024 revenue of approximately $2.05 billion-$2.15 billion versus a consensus of $2.12 billion. 

The guidance includes $290 million-$300 million of revenue related to the Lima acquisition, which closed on January 3, 2024. 

It guided for an adjusted EBITDA of $365-$380 million, including $70-75 million from Lima. 

Full-year 2024 adjusted earnings per diluted share are expected to be $2.50-$2.65 versus consensus of $2.71.

William Blair says the integration of Lima has introduced various components affecting profit and loss. Despite this, initial analysis of the fourth-quarter results and 2024 guidance indicates that the expectation for sustained growth and enhanced margins is still valid. 

William Blair maintains an “Outperform” rating for the shares, considering their current valuation at 11 times the estimated EBITDA for 2025.

Price Action: ENOV shares are up 7.56% at $64.83 on the last check Thursday.