Sunday, April 30, 2017

K2M On Track, Gaining Share, And Continuing To Disrupt

Spine care company K2M (NASDAQ:KTWO) isn't going to be the easiest stock to own, as I expect investors to overreact to quarterly revenue trends and guidance, and I fully expect some bumps in the road as the company continues to launch and grow a portfolio of disruptive technologies for the spine care market. I also expect ongoing growth, though, as the company out-innovates its larger rivals, takes share, and ultimately leverages that into solid profits.

The shares are up about 20% since my last update, sandwiching the company between the outperforming Globus (NYSE:GMED) and underperforming NuVasive (NASDAQ:NUVA) over that time. Trading in the low $20s, the shares still look a little undervalued on the basis of medium-term revenue growth and margin outlook and look relatively appealing up to around $25. Although that doesn't leave a tremendous amount of upside from today's level, I would not be surprised if K2M outperformed, and I would keep this name in mind if the company's early May earnings report sees an overdone negative reaction.

Read more here:
K2M On Track, Gaining Share, And Continuing To Disrupt

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