Merit Medical Hits 52-Week High on Product Pipeline Strength - Analyst Blog

Shares of medical devices maker Merit Medical Systems, Inc. (MMSI) attained a new 52-week high of $17.23 in mid-day trading on Dec 18. The bullish run reflects an expanding product portfolio, innovative pipeline and positive long-term outlook.  

The company's shares eventually closed at $17.03 on the day, translating into a decent one-year return of around 16% and a year-to-date return of roughly 8%. This South Jordan, UT-based company has a market cap of around $739 million while average volume of shares traded over the last three months stands at roughly 0.3 million.

In the beginning of this month, Merit Medical received U.S. Food and Drug Administration (FDA) approval for three of its products – the ReSolve Biliary Locking Drainage Catheter, the ONE Snare Endovascular Microsnare System and the AEROmini Tracheobronchial Stent System.

All the three products, according to management, will be launched in the U.S. at the beginning of 2015. We believe that this will enhance Merit Medical's existing product portfolio and help it gain an edge in the competitive medical devices market. The product launches are also expected to boost top-line growth for the company.

Merit Medical reported an impressive third-quarter 2014, with adjusted earnings of 25 cents per share steering past the Zacks Consensus Estimate of 16 cents. Revenues increased 12% year over year to $129 million and were in line with expectations.

Notably, in the third quarter, catheter sales grew 20% on a year-over-year basis. The new Biliary Locking Drainage Catheter is expected to further boost sales of catheters and subsequently aid top-line growth.

This Zacks Rank #2 (Buy) stock has a higher long-term expected earnings growth rate of 14%, compared with industry growth of 13.5%.

Strong third-quarter results, a string of FDA approvals for its new products along with a robust product pipeline, all contribute to the growth trajectory of this company, creating good momentum for 2015 as well.

However, the medical devices market has quite a number of peers who are vying for better market traction. It remains to be seen whether the new range of products and services at Merit Medical can counter similar offerings from the likes of AngioDynamics Inc. (ANGO), Teleflex Inc. (TFX) and Boston Scientific Corp. (BSX).