Piper Sandler has adjusted its price target for Merit Medical Systems, Inc. (MMSI, Financial), reducing it from $112 to $106 while maintaining an Overweight rating on the stock. This revision comes after Merit Medical reported first-quarter results that surpassed expectations on both revenue and earnings fronts. A significant expansion in gross margins was one of the highlights of the report.
In the earnings discussion, the impact of tariff pressures and slower-than-anticipated progress in the Chinese market were key topics addressed by the company. Piper Sandler acknowledged these challenges but expressed confidence in Merit Medical's strategy, emphasizing the company's consistent approach to setting cautious forward-looking guidance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Merit Medical Systems Inc (MMSI, Financial) is $117.20 with a high estimate of $128.00 and a low estimate of $111.00. The average target implies an upside of 23.80% from the current price of $94.67. More detailed estimate data can be found on the Merit Medical Systems Inc (MMSI) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Merit Medical Systems Inc's (MMSI, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Merit Medical Systems Inc (MMSI, Financial) in one year is $89.56, suggesting a downside of 5.4% from the current price of $94.67. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Merit Medical Systems Inc (MMSI) Summary page.
MMSI Key Business Developments
Release Date: February 25, 2025
- Total Revenue: $355.2 million, up 9% year-over-year on a GAAP basis and 10% on a constant currency basis.
- Non-GAAP Operating Margin: 19.6% of sales, up approximately 305 basis points year-over-year.
- Non-GAAP Earnings Per Share: Increased 26% year-over-year.
- Non-GAAP Gross Margin: 53.5%, up 304 basis points year-over-year.
- Free Cash Flow: More than $185 million for fiscal year 2024, up 67% year-over-year.
- Cardiovascular Segment Revenue Growth: 8% year-over-year.
- Endoscopy Segment Revenue Growth: 88% year-over-year.
- Net Income: $56.3 million or $0.93 per share, compared to $43.1 million or $0.74 per share in the prior year period.
- Operating Expenses: Increased 9% year-over-year.
- Cash and Cash Equivalents: $376.7 million as of December 31, 2024.
- Total Debt Obligations: $747.5 million as of December 31, 2024.
- US Sales Growth: Increased nearly 14% on a constant currency basis.
- International Sales Growth: Increased 5% year-over-year on a constant currency basis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Merit Medical Systems Inc (MMSI, Financial) reported a total revenue of $355.2 million for Q4 2024, marking a 9% year-over-year increase on a GAAP basis and a 10% increase on a constant currency basis.
- The company achieved a non-GAAP operating profit growth of 30% and a non-GAAP operating margin of 19.6%, up approximately 305 basis points year-over-year.
- Non-GAAP earnings per share grew by 26%, exceeding the high end of expectations.
- Merit Medical Systems Inc (MMSI) generated strong free cash flow of more than $185 million in 2024, up 67% year-over-year.
- The Cardiovascular segment saw an 8% growth, and the Endoscopy segment experienced an 88% growth in Q4 2024.
Negative Points
- The company's EPS guidance for 2025 was perceived as conservative, partly due to accounting on the convertible note, which added $0.11 of dilution.
- International sales growth was softer than expected, particularly in the EMEA region, due to softness in Russia and distributor markets.
- Operating expenses increased by 9% in Q4 2024, driven by a 6% increase in SG&A expenses and a 26% increase in R&D expenses.
- The Endoscopy segment's guidance for 2025 was slightly lower than anticipated, attributed to the integration of two sales forces.
- Merit Medical Systems Inc (MMSI) faces potential headwinds from tariffs, which are not factored into the 2025 financial guidance.
