The market for implants and tools used in spinal surgery hasn't been
immune to some of the challenges that have beset other large orthopedic
markets, but NuVasive (NASDAQ:NUVA) has continued to reap the benefits from its leverage to faster-growing minimally invasive procedures. Up more than 25% from my last article,
NuVasive has been not only outgrowing the spine market but also showing
at least some of the long-awaited operating margin leverage that
management had promised.
NuVasive hasn't always (or even often)
looked cheap by the more conservative DCF valuation approach, but the
shares could still trade higher if management continues to deliver
margin improvement and above-average growth and the market rewards the
shares with a valuation more in line with its revenue growth and margin
potential. Although there are better bargains in small and mid-cap
health care, NuVasive has a stronger market share position than most and
a clearer runway to market share, revenue, profit, and cash flow
growth.
Read more here:
Can NuVasive 2.0 Take The Shares To New Highs?
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