Here's Why You Should Retain Merit Medical Stock in Your Portfolio

Core Viewpoint - Merit Medical Systems, Inc. (MMSI) is positioned for growth due to a strong product portfolio and solid second-quarter 2024 performance, despite facing challenges from healthcare industry consolidation and forex volatility [1][2]. Financial Performance - The company has experienced a 26.6% stock price increase over the past six months, outperforming the industry, which declined by 7.8%, while the S&P 500 rose by 9% [2]. - Merit Medical has a market capitalization of $5.62 billion and projects a 12% growth rate over the next five years, with an average earnings surprise of 8.39% over the past four quarters [2]. Q2 Results - The second-quarter 2024 results showed year-over-year growth in both revenue and earnings, with revenue increases across segments and product categories, particularly in the Cardiovascular unit [3]. - The company reported margin expansion, indicating improved profitability [3]. Product Portfolio - Merit Medical has gained momentum through new product launches and acquisitions, including a recent agreement to purchase Cook Medical's lead management portfolio [4]. - Recent product releases include the basixSKY Inflation Device and the Siege Vascular Plug, along with the Bearing nsPVA Express Prefilled Syringe [5]. Research and Development - R&D remains a critical component of Merit Medical's growth strategy, with R&D expenses rising by 0.7% year-over-year to $20.3 million [6]. - The company is focused on innovation, leading to new product introductions and enhancements in existing products [6]. Industry Challenges - The healthcare industry is experiencing higher consolidation, leading to increased pressure on pricing as larger companies seek to reduce costs and eliminate competition [7][8]. - Forex volatility poses risks to Merit Medical's international operations, potentially impacting margins and financial results if foreign currencies decline against the U.S. dollar [9]. Estimate Trends - There is a positive estimate revision trend for 2024, with the Zacks Consensus Estimate for EPS increasing by 0.6% to $3.33 [10]. - The consensus estimate for Q3 2024 revenues is $334.7 million, reflecting a 6.2% increase from the previous year, with EPS expected to improve by 6.7% [10].