Merit Medical Systems Earnings Preview

Merit Medical Systems (Nasdaq: MMSI  ) only managed to meet estimates last quarter, but investors hope that it will surpass expectations this quarter. The company will unveil its latest earnings on Thursday, Feb. 23. Merit Medical Systems develops, manufactures, and markets disposable medical products mainly used in diagnostic and interventional cardiology and radiology procedures.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Merit Medical Systems, with six out of seven rating it a buy and the remainder rating it a hold. Analysts don't like Merit Medical Systems as much as competitor ICU Medical overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $91.9 million in revenue this quarter. That would represent a rise of 13.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.19 per share. Estimates range from $0.18 to $0.19.

What our community says:
CAPS All-Stars are strongly backing the stock, with 100% giving it an outperform rating. The greater community agrees with the All-Stars, as 94.6% give it a rating of outperform. Even with a robust four out of five stars, Merit Medical Systems' CAPS rating falls a little short of the community's upbeat outlook.

Management:
The company boosted its gross margin by 2.7 percentage points in the last quarter. Revenue rose 23.6% while cost of sales rose 17.9% to $49.4 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Merit Medical Systems has seen increasing gross margins year over year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. Here are Merit Medical Systems' reported margins for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

45.4%

46.6%

45.9%

44.8%

Operating Margin

7.2%

11.9%

11.8%

6.8%

Net Margin

5.0%

7.5%

7.7%

5.2%

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Earnings estimates provided by Zacks.

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