Haemonetics Stock Up 10.9% YTD: Will the Rally Continue?

Haemonetics Corporation‘s HAE shares have increased 10.8% year to date compared with the industry's rise of 6.1%. The Medical sector has gained 1% in the said time frame. The company has a market capitalization of $4.82 billion.

The consistent growth performance in the past few quarters, reflecting its strategic focus on establishing leading positions in high-growth markets to generate solid financial returns, is likely to drive this Zacks Rank 1 (Strong Buy) stock.

Its earnings are expected to grow 12% in the next five years. HAE's ROE for the trailing 12 months was 4.6%, better than the industry average of 0.2%.

Will the Upside Continue?

The Zacks Consensus Estimate for HAE's 2025 earnings is pegged at $1.40, indicating a 6.9% increase from the year-ago reported figure. The consensus estimate for 2025 revenues is pegged at $4.46 billion, indicating a year-over-year improvement of 12.6%.

Haemonetics is gaining from the newly-completed limited market release of the new Express Plus technology with more than 60,000 real-world collections. Haemonetics is currently initiating its full-market release in the United States. This technology is fast gaining new customers.

The rollout of Persona — the company's proprietary technology proven to increase yield from 9% to 12% on average — continues to gain momentum, with more than 25 million collections. During the fiscal fourth-quarter update, management noted that the continued transition from the company's PCS2 devices to the latest NexSys with Persona Technology will drive meaningful improvements in 2025.

Within Vascular Closure, the company is on track to be in 80% of the target top 600 U.S. hospital accounts by the end of this fiscal year, providing it access to the vast majority of addressable procedures in this market. The company also received the FDA's premarket approval for the upsized VASSCADE MVPXL mid-bore venous closure device. Adding MVPXL to its product mix with 58% larger collagen plugs than MVP strengthens Haemonetics' unique proposition of reducing the time to ambulate, total post-procedure time, time to hemostasis and time to discharge eligibility, broadening the company's reach in these high-growth markets.

Internationally, Haemonetics products are gaining traction. The VASCADE International launch is progressing as expected, contributing approximately 300 basis points of revenue growth in the fiscal fourth quarter.

Hemostasis management growth continues to be driven by strong utilization of TEG 6s disposables, price increases and continued growth of the U.S. installed base. HAE also secured FDA approval for its global hemostasis heparin neutralization cartridge during the fiscal fourth quarter. This, according to Haemonetics, is an essential addition to its portfolio to increase adoption by helping clinicians improve patient outcomes and standards of care.

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The company is anticipating sustaining its growth momentum as it capitalizes on its significantly expanded R&D and clinical capabilities to develop new and existing products and commercial infrastructure to cover the majority of its strategic accounts in the $700 million underpenetrated total addressable market.

Upbeat guidance is an indicator of future growth. For 2025, the company expects total GAAP revenue growth in the range of 5-8% on a reported basis. Organic revenue growth, too, is anticipated in the range of 0-3%. HAE expects full-year 2025 adjusted earnings per share in the band of $4.45-$4.75.

Estimate Trends

The Zacks Consensus Estimate for HAE's 2025 and 2026 has moved 16.5% and 22% north, respectively, in the past 90 days, reflecting analysts' optimism.

Key Picks

Some better-ranked stocks from the broader medical space are Medpace MEDP, ResMed RMD and Encompass Health Corporation EHC.

Medpace, sporting a Zacks Rank #1, reported a first-quarter 2024 EPS of $3.20, beating the Zacks Consensus Estimate by 30.6%. Revenues of $511 million increased 17.7% from last year's comparable figure.

Medpace has an estimated 2024 earnings growth rate of 26.5% compared with the industry's 12.3%. The company's earnings surpassed estimates in each of the trailing four quarters, the average being 12.8%.

ResMed, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2024 EPS of $2.13, which topped the Zacks Consensus Estimate by 10.9%. Revenues of $1.20 billion surpassed the Zacks Consensus Estimate by 1.9%.

RMD has an estimated fiscal 2024 earnings growth rate of 17.9% compared to the industry's 15.7%. In each of the trailing four quarters, the company delivered an average earnings surprise of 2.8%.

Encompass Health, carrying a Zacks Rank #2, reported a first-quarter 2024 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 20.4%. Net operating revenues of $1.3 billion topped the Zacks Consensus Estimate by 3.6%.

EHC has an estimated long-term earnings growth rate of 15.6% compared with the industry's 11.7% growth. The company's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.7%.

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