CONMED (CNMD) Hits A 52-Week High: What's Driving The Stock?

Shares of Utica, NY-based leading medical technology player, CONMED Corporation (NASDAQ:CNMD) rallied to a new 52-week high of $52.79 on Jun 13, closing a little lower at $52.49. This represents a strong year-to-date return of approximately 19.9%, better than the S&P 500’s 9%.

For the majority of the last three months, the company’s share price has outperformed the Zacks classified Medical/Dental-Supplies sub-industry. The stock has rallied 23.7%, outshining the sub-industry’s gain of 6.6%. Notably, the stock has a market cap of $1.46 billion.

Taking the stable performance of the stock into consideration, we expect CONMED to gain more ground in the coming quarters. The company’s positive long-term growth of 8.5% also raises optimism.

The stock currently has a Zacks Rank #3 (Hold).

Growth Catalysts

Strong Prospects in the Niche Space: CONMED has been gaining prominence in the minimally invasive surgery markets as a large percentage of the company’s products are designed for such procedures. Per a report by the Markets And Markets, the minimally invasive surgical instruments market is forecasted to reach a worth of $21.47 billion by 2021 at a CAGR of 9.1%.

The general surgery segment of the company witnessed stellar gains, registering a 9.7% increase at constant currency (cc) in the last reported quarter.

Broad Product Spectrum: CONMED offers a broad line of surgical products. The company’s product pipeline consists of several new devices including three new sports medicine products, three endomechanical offerings, a new electrosurgical council and the latest 2D Arthroscopy video system. With increased product offerings, the company can accelerate its top line.

Impressive First-Quarter Numbers: CONMED reported stellar first-quarter 2017 results, crushing the Zacks Consensus Estimate on both the counts. Revenues increased 3% year over year to $180 million, while adjusted earnings improved 26.7%.

In terms of product category, sales of single-use products increased 4% at cc to $149.8 million. Coming to the capital products, sales inched up 2.4% at cc to $36.8 million.

Guidance Upbeat: An upbeat guidance instills our confidence in the stock. For the full year, CONMED expects sales growth in the band of 1% to 3% at cc. The company projects adjusted earnings per share in the range of $1.85 to $1.95.

Favorable Estimate Revision Trend:CONMED’s estimate revision trend looks promising at the moment. The estimates for the full year increased 0.5% to $1.90 over the last two months, as one analyst moved north and one went south.

CONMED Corporation Price and Consensus

CONMED Corporation Price and Consensus | CONMED Corporation Quote

Key Picks

Better-ranked stocks in the broader medical sector include Inogen Inc. (NASDAQ:INGN) , Luminex Corporation (NASDAQ:LMNX) and IDEXX Laboratories, Inc. (NASDAQ:IDXX) . Notably, Inogen and Luminex Laboratories sport a Zacks Rank #1 (Strong Buy) while IDEXX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.50%. Notably, the stock represents an impressive one-year return of 87.7%.

Luminex has a long-term expected earnings growth rate of 16.3%. The stock posted a positive earnings surprise of 237.5% in the last reported quarter.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.37%. Additionally, the stock represents an impressive one-year return of 81.2%.

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