The medical device space has taken a few more body-blows in recent months, with elective procedure counts once again impacted by the pandemic and cost inflation pressuring margins. While the cost inflation is going to be a lingering issue, elective procedure counts should improve and normalize as the year goes on, driving some decent revenue prospects as hospitals work through their backlogs.
Specific to Merit Medical Systems Inc. (NASDAQ:MMSI), the share price underperformance since my last update looks a little excessive. Although I didn't find the valuation compelling then, a 10%-plus decline on top of good results in the second half of 2021 and guidance for 2022 changes the math some. Although smaller med-techs with single-digit revenue growth prospects can sometimes linger in valuation purgatories, mid-single-digit revenue growth and ongoing margin improvement should be able to support a return to the $70's for these shares.
Read more here:
Merit Medical's Underperformance Seems Overdone As Elective Procedures Normalize
No comments:
Post a Comment