Sooner or later, small med-tech company and Motley Fool Stock Advisor recommendation Integra LifeSciences (NASDAQ:IART) will have to show that it can achieve high levels of sustainable growth without relying on a stream of acquisitions to boost numbers. While the company may very well be entitled to a pass for now, as it builds its business toward a critical mass, there comes a time when every company stands or falls based upon what they can do with what they already have.

Although the top-line number for the third quarter was a bit lower than the bottom end of the published analyst range, growth was still decent at 17% overall. Subtracting out acquired businesses and products, sales growth would have been more like 11% -- still below the company's stated long-term goal of 15-20% organic growth.

Turning to the operations, reported gross margin held steady, and the operating margin improved on a sequential basis. Reported net income reversed a year-ago loss, though adjusting both numbers for acquisitions results in 34% growth in income. Although management likes to exclude acquisition costs when talking about the performance of the business, I think you could make a counter-argument that the company has long been committed to acquisitions, and so looking at both sets of numbers is relevant.

Once again, implant revenue was the leader in terms of both growth, and absolute revenue dollars as products like the Nerve Guide and wound care-related products performed well. And once again, monitoring sales were relatively weak for the company, although they were up almost 10% on a sequential comparison.

Certainly there are heady growth expectations around Integra from both inside and outside the company. Management has talked about long-term growth in the neighborhood of 18%, while analysts seem to expect earnings growth of around 25% over the next few years. Those numbers are certainly attainable -- well-run medical technology companies can readily grow at those rates, especially once they reach a tipping point with respect to product positioning and sales infrastructure.

That said, valuation here relies very heavily on those targets being met. Quite frankly, the only way this stock works from a cash flow valuation standpoint is if the company does in fact deliver very good growth over the next 10 years or so. Still, valuations in the med-tech sector are often higher than those in other industries, as you can see with large caps such as Medtronic (NYSE:MDT) and St. Jude (NYSE:STJ), or with smaller companies such as IntuitiveSurgical (NASDAQ:ISRG) or ResMed (NYSE:RMD).

Fool on with more med-tech Takes:

Intuitive Surgical is a Motley Fool Rule Breakers recommendation.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).