On Wednesday, Merit Medical Systems , Inc. (NASDAQ:MMSI) saw its price target increased by Piper Sandler to $97.00, up from the previous target of $95.00. The firm maintained an Overweight rating on the stock.
This adjustment follows the announcement of Merit Medical's first-quarter results, which exceeded expectations with revenue reaching $324 million, marking a 9.3% increase on a constant currency basis, and earnings per share (EPS) of $0.77. These figures surpassed the Street's projections of $316 million in revenue and an EPS of $0.71.
The company's performance was particularly strong in its Peripheral Intervention segment, which grew organically by 13%. Additionally, the gross margin percentage was healthy and contributed to the quarter's success. Other positive developments included a notable 22% year-over-year growth in China and free cash flow (FCF) of $25 million. Management's confirmation of their guidance was also among the expected outcomes that aligned with the first-quarter report.
Piper Sandler's commentary highlighted the consistency of Merit Medical's quarterly execution, a reputation that the management team has cultivated over the past few years. The firm cited these solid results, the absence of any significant issues, and an attractive valuation as the rationale behind their continued endorsement of Merit Medical as their top stock pick for the year 2024.
InvestingPro Insights
Merit Medical Systems, Inc. (NASDAQ:MMSI) has demonstrated a robust financial performance, with several positive indicators that investors might find encouraging. The company's recent first-quarter results have surpassed expectations, and the outlook remains positive. With a market capitalization of $4.29 billion and a revenue growth of 9.24% over the last twelve months as of Q4 2023, Merit Medical is showing signs of strong financial health.
The current P/E ratio stands at 45.65, and when adjusted for the last twelve months as of Q4 2023, it is slightly lower at 44.07. This high earnings multiple might suggest that investors are expecting higher future growth, which aligns with the InvestingPro Tips indicating that net income is expected to grow this year. Additionally, three analysts have revised their earnings upwards for the upcoming period, which may further justify the current valuation.
While trading at a high P/E ratio relative to near-term earnings growth, Merit Medical's stock generally trades with low price volatility. This could be an attractive feature for investors seeking stability in their investments. Furthermore, with cash flows that can sufficiently cover interest payments and liquid assets exceeding short-term obligations, the company's financial position appears solid.
For investors looking for more detailed analysis and additional InvestingPro Tips, there are 13 more tips available, which can be accessed by visiting https://www.investing.com/pro/MMSI. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which offers more in-depth insights and tips for informed decision-making.
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