The company, with a market capitalization of $766.6 million, is a leading provider of medical device and In Vitro Diagnostics (IVD) technologies to the healthcare industry. The company’s earnings are expected to improve 10% over the next five years. However, this currently Zacks Rank #2 (Buy) company has a trailing four-quarter earnings miss of 369.2%, on average.
In the past three months, the stock has gained 34.4% compared with 3.3% growth of its industry.
Let’s delve deeper into the factors working in favor of the company.
R&D Update: Surmodics’ solid efforts to improve R&D are a consistent key driver. Its whole product solutions pipeline and Sirolimus-based below-the-knee DCB program deserve mention here. The company continues to make significant progress when it comes to its other radial access therapeutic devices including the 0.18 transradial PTA balloon catheter.
In November 2020, the company released 6-month data from the AVESS first-in-human (FIH) study of the company’s Avess AV Fistula DCB. In January 2021, it completed enrollment in the SWING first-in-human clinical trial on Sundance sirolimus DCB, ahead of schedule. SWING enrolled 35 patients across eight sites in Europe, Australia and New Zealand.
Regulatory Approvals: In September 2020, the company received the FDA 510(k) clearance for its Pounce Thrombus Retrieval System, which enables non-surgical removal of thrombi and emboli from the peripheral arterial vasculature. This approval will provide a boost to Surmodics’ Medical Devices segment. With regard to the .018” balloon dilation catheter, the company is making a steady progress through the fiscal first quarter and expects to file for its FDA 510(k) approval in the third quarter of fiscal 2021. It is also on track to attain the PMA for SurVeil by the end of calendar 2021.
Acquisitions and Partnerships: Surmodics made several acquisitions over the last few years, which not only diversified its revenue base but also expanded its customer base.With regard to the company’s product portfolio of specialty catheters, its hydrophilic PTA 0.014″ and 0.018″ balloon catheters, which expanded its partnership with Cook Medical, are now commercially launched in the United States.
This deal is expected to bolster Surmodics’ capability to support key projects and strengthen its technical and business management teams.
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $103.5 million, indicating a rise of 9.2% from the prior fiscal year’s reported number. The same for earnings stands at 36 cents per share, suggesting growth of 176.9% from the previous fiscal year’s reported figure.
Other Key Picks
Some other top-ranked stocks from the broader medical space are Align Technology (ALGN – Free Report) , Abbott Laboratories (ABT – Free Report) and Hologic (HOLX – Free Report) . While Align Technology currently sports a Zacks Rank #1 (Strong Buy), the other two presently carry a Zacks Rank of 2 . You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has a projected long-term earnings growth rate of 19%.
Abbott has a projected long-term earnings growth rate of 14.1%.
Hologic has an estimated long-term earnings growth rate of 15.4%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year’s 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.