Yahoo Finance Here's Why You Should Buy Haemonetics (HAE) Stock Now
Haemonetics HAE is well-poised to grow in the coming quarters, backed by the strong potential of the Plasma franchise. The company’s hospital portfolio is evolving and helping create new opportunities for growth and diversification. Strong financial stability also buoys optimism.
Meanwhile, headwinds from economic uncertainties and adverse foreign exchange effects are concerns for Haemonetics’ operations.
In the past year, this Zacks Rank #2 (Buy) stock has rallied 11.7% against the 1.3% fall of the industry and a 26.7% increase of the S&P 500 composite.
The global provider of blood and plasma supplies and services has a market capitalization of $4.84 billion. HAE surpassed estimates in each of the trailing four quarters, delivering an average earnings surprise of 13.24%.
Let’s delve deeper.
Tailwinds
Potential Upsides of Plasma Franchise: Haemonetics’ Plasma business unit focuses on the collection of source plasma for pharmaceutical manufacturers using apheresis devices that only collect plasma. Plasma revenues grew 6% in the fourth quarter of fiscal 2024, driven primarily by disposable volume and software. The collections environment in the United States continued to be favorable, with disposables growing 4% in the quarter and 13% in fiscal 2024. The company is gaining from the newly completed limited market release of the new Express Plus technology with more than 60,000 real-world collections.
The rollout of Persona — the company’s proprietary technology proven to increase yield from 9% to 12% on average — continues to gain momentum, with more than 25 million collections. Advancements in NexLynk DMS, its bidirectional connectivity software, are improving cycle times, reducing errors and allowing staff to focus on taking care of donors and reducing door-to-door time, a key determinant of donor satisfaction.
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Hospital Business Recovery Continues: The company is taking impactful steps to support growth in the Hospital business, which contributes to broadening its global presence and retaining industry leadership. In the fiscal fourth quarter, hospital revenues increased 19%, driven by the continued success of Vascular Closure and hemostasis management. The Vascular Closure business continued to gain, driven by new account openings, both in electrophysiology and interventional cardiology.
Within Vascular Closure, the company received the FDA’s premarket approval for the upsized VASSCADE MVPXL mid-bore venous closure device. The VASCADE International launch is progressing as expected, contributing approximately 300 basis points of revenue growth in the fiscal fourth quarter.
In December 2023, Haemonetics acquired OpSens. The buyout expands its Hospital business with procedure-enabling technologies in high-growth areas. Following this, OpSens Pressure Sensing Guidewire Technology delivered nearly $10 million in revenues in the fourth quarter. Further, in April, the company launched OptiWire and SavvyWire throughout its U.S. commercial channels.
Strong Solvency: Haemonetics exited the fiscal fourth quarter with cash and cash equivalents of $178.8 million and a near-term payable debt of $10.2 million, suggesting strong solvency.
The long-term debt at the end of the fiscal fourth quarter was $797.6 million, down from $856.8 million at the end of the third quarter of 2024. The total debt-to-capital ratio stood at 45.7%, sequentially down from the third quarter’s 47.6%.
Downsides
Economic Uncertainty a Concern: Continued inflationary pressures, rising interest rates and macroeconomic conditions have increased the risk of economic challenges that Haemonetics faces. Despite the cost containment measures, selective price increases and other actions to offset these inflationary pressures in its global supply chain, there’s a risk that the company may not succeed completely. In the fiscal fourth quarter, Haemonetics faced 700 basis points of margin pressure stemming primarily from inflationary headwinds and supply chain disruptions, among other challenges.
Foreign Exchange Translation Impacts Sales: The company’s international sales are primarily conducted in local currencies, mainly the Japanese Yen, Euro and Chinese Yuan. Hence, Haemonetics’ operational results are impacted by changes in foreign exchange rates, particularly in the value of the Yen and Euro relative to the U.S. dollar. In the fiscal fourth quarter, revenues were negatively impacted by unfavorable foreign exchange translation.
Estimate Trend
The Zacks Consensus Estimate for Haemonetics’ fiscal 2025 earnings has moved to $4.46 from $4.24 in the past 30 days.
The Zacks Consensus Estimate for the company’s fiscal 2025 revenues is pegged at $1.40 billion, which suggests a 6.9% increase from the year-ago reported number.
Other Key Picks
Some other top-ranked stocks in the broader medical space are ResMed RMD, Hims & Hers Health HIMS and Medpace MEDP.
ResMed’s earnings are expected to increase 18.6% in fiscal 2024 compared with the industry’s 14.6%. RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%. Its shares have fallen 3.2% compared with the industry’s 1.3% decline in the past year.
RMD sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hims & Hers Health, sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of a staggering 263.6% compared to the industry’s 19.1%. Shares of the company have surged 84.8% against the industry’s 25.4% fall over the past year.
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 79.2%. In the last reported quarter, it delivered an average earnings surprise of 150%.
Medpace, also sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 27.1% compared to the industry’s 13.4%. Shares of MEDP have rallied 89.2% compared with the industry’s 4.8% rise over the past year.
MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%. In the last reported quarter, it delivered an average earnings surprise of 30.6%.
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