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Merit Medical Systems (MMSI)
NASDAQ:MMSI
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Merit Medical Systems
(NASDAQ:MMSI)
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Rating:79Outperform
Price Target:
$102.00
▲(22.02% Upside)
Merit Medical Systems demonstrates strong financial performance and positive earnings call sentiment, which are the most significant factors driving the score. Technical analysis suggests a neutral trend, while valuation concerns due to a high P/E ratio and no dividend yield slightly offset the positives. The company's strategic initiatives and leadership changes support a positive outlook despite some market challenges.
Positive Factors
Revenue Growth
The 13% YoY revenue growth indicates strong demand for Merit Medical's products and effective market expansion strategies, supporting long-term growth.
Operating Margin Improvement
Improved operating margins reflect enhanced operational efficiency and cost management, contributing to sustainable profitability.
Cash Flow Management
Strong free cash flow growth enhances financial flexibility, enabling further investment in growth initiatives and debt reduction.
Negative Factors
Reimbursement Strategy Delays
Delays in reimbursement strategies can hinder revenue growth from new products, impacting future financial performance.
Soft Performance in China
Declining sales in China highlight regional market challenges, potentially affecting the company's international growth prospects.
Tariff Uncertainties
Tariff-related expenses increase product costs, potentially squeezing margins and affecting competitive positioning in key markets.
Merit Medical Systems (MMSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.95B
Dividend YieldN/A
Average Volume (3M)590.57K
Price to Earnings (P/E)42.5
Beta (1Y)0.52
Revenue Growth10.14%
EPS Growth0.04%
CountryUS
Employees7,400
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)1.01
Shares Outstanding59,219,116
10 Day Avg. Volume809,117
30 Day Avg. Volume590,570
Financial Highlights & Ratios
PEG Ratio1.78
Price to Book (P/B)4.08
Price to Sales (P/S)4.15
P/FCF Ratio30.81
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue4.29
Enterprise Value/Gross Profit8.94
Enterprise Value/Ebitda19.99
Forecast
1Y Price Target
$103.91Price Target Upside24.31% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Merit Medical Systems Business Overview & Revenue Model
Company DescriptionMerit Medical Systems, Inc. designs, develops, manufactures, and markets single-use medical products for interventional, diagnostic, and therapeutic procedures, primarily in cardiology, radiology, oncology, critical care, and endoscopy. The company operates in two segments, Cardiovascular and Endoscopy. It provides peripheral intervention products for the diagnosis and treatment of diseases in peripheral vessels and organs; and cardiac intervention products, such as access, angiography, electrophysiology and cardiac rhythm management, fluid management, hemodynamic monitoring, hemostasis, and intervention to treat various heart conditions. The company also offers custom procedural solutions that include critical care products, disinfection protection systems, syringes, manifold kits, and trays and packs; coated tubes and wires; and sensor components for microelectromechanical systems. In addition, it provides pulmonary products that consist of laser-cut tracheobronchial stents, over-the-wire and direct visualization delivery systems, and dilation balloons to endoscopically dilate strictures; gastroenterology products; and kits and accessories for endoscopy and bronchoscopy procedures. The company sells its products to hospitals and alternate site-based physicians, technicians, and nurses through direct sales force, distributors, original equipment manufacturer partners, or custom procedure tray manufacturers in the United States and internationally. Merit Medical Systems, Inc. was incorporated in 1987 and is headquartered in South Jordan, Utah.
How the Company Makes MoneyMerit Medical generates revenue primarily through the sale of its medical devices and products to hospitals, healthcare providers, and distributors. The company's revenue model is based on direct sales and distribution agreements, with significant contributions from both domestic and international markets. Key revenue streams include sales of interventional cardiology and radiology products, as well as urology and surgical products. Additionally, Merit Medical benefits from strategic partnerships with healthcare organizations and distributors that expand its market reach and enhance its product offerings, further driving revenue growth.
Merit Medical Systems Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
Merit Medical Systems demonstrated strong financial performance with significant revenue and margin improvements, bolstered by strategic acquisitions and product growth. However, delays in reimbursement strategies and challenges in the Chinese market present headwinds. Despite these, the company maintains a positive outlook with strategic leadership changes and continued operational efficiency.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Merit Medical Systems reported a total revenue of $382.5 million for Q2 2025, marking a 13% increase year-over-year on a GAAP basis and 12.5% on a constant currency basis, exceeding expectations.
Improved Operating Margin
The company achieved a non-GAAP operating margin of 21.2%, an increase of 109 basis points year-over-year, the highest in the company's public history.
Free Cash Flow Increase
Merit generated $70 million of free cash flow, reflecting a 20% increase year-over-year, contributing to a strong financial position.
Cardiac Intervention Growth
Cardiac intervention product sales increased 23%, driven by internal product developments and strategic acquisitions.
Strategic Acquisition
Acquisition of Biolife Delaware, L.L.C. for $120 million, expanding Merit's portfolio in hemostatic solutions.
CEO Succession
Appointment of Martha Aronson as new President and CEO, effective October 3, 2025, to lead the next stage of growth.
Negative Updates
Reimbursement Strategy Delays
Delay in securing add-on reimbursement for WRAPSODY CIE in the outpatient setting, pushing potential contributions to 2026.
Soft Performance in China
Sales in China decreased by 6% due to a challenging macro environment, impacting overall APAC growth.
Tariff Uncertainties
Continued challenges with tariff-related expenses, impacting product cost and overall financial outlook.
Company Guidance
During Merit Medical Systems' second quarter 2025 earnings call, the company provided updated financial guidance for the year. They reported total revenue of $382.5 million, reflecting a 13% year-over-year increase on a GAAP basis and 12.5% on a constant currency basis. The company noted a significant improvement in non-GAAP operating margin, which rose by nearly 109 basis points to a record 21.2%. Non-GAAP EPS grew by 10%, surpassing expectations, and free cash flow increased by 20% year-over-year to $70 million. Merit Medical's fiscal year 2025 guidance was updated to reflect a GAAP net revenue growth of 10% to 11%, with a constant currency revenue growth expectation of 9.7% to 10.6%. The company also revised its non-GAAP diluted EPS guidance to a range of $3.52 to $3.72, increased from the prior range of $3.28 to $3.41.Merit Medical Systems Financial Statement Overview
Summary
Merit Medical Systems presents a strong financial profile with robust revenue growth and profitability improvements. However, increased leverage poses a potential risk.Income Statement
Merit Medical Systems has demonstrated robust revenue growth with a notable increase in revenue from $963.88M in 2020 to $1,387.93M in TTM, marking consistent expansion. The Gross Profit Margin has been stable, reflecting efficient cost management. The company improved its Net Profit Margin from negative levels in 2020 to 8.81% in TTM, indicating enhanced profitability. The EBIT and EBITDA margins show healthy operational efficiency. Overall, the income statement reflects strong growth and profitability, though attention should be paid to maintaining margins as competition intensifies.85
Very Positive
Balance Sheet
The balance sheet reveals a solid financial position with a significant increase in Stockholders' Equity from $958.58M in 2020 to $1,428.42M in TTM. The Debt-to-Equity ratio has increased due to rising debt levels, which could imply higher financial leverage. However, the Return on Equity (ROE) has improved, reflecting effective use of equity to generate profits. The equity ratio suggests a balanced capital structure. The company's leverage strategy should be monitored to ensure sustainable growth.78
Positive
Cash Flow
Merit Medical Systems has shown strong cash flow management with a consistent increase in Operating Cash Flow, reaching $225.16M in TTM. Free Cash Flow has also grown, indicating good cash generation capabilities. The Free Cash Flow to Net Income ratio is favorable, suggesting efficient conversion of net income into cash. However, fluctuations in investing cash flows highlight potential capital allocation challenges. Overall, the company shows strong cash flow generation but should ensure prudent investment strategies.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.43B | 1.36B | 1.26B | 1.15B | 1.07B | 963.88M |
| Gross Profit | 687.02M | 643.33M | 583.87M | 519.10M | 485.33M | 401.18M |
| EBITDA | 307.29M | 297.60M | 231.44M | 181.15M | 153.45M | 102.71M |
| Net Income | 119.12M | 120.36M | 94.41M | 74.52M | 48.45M | -9.84M |
Balance Sheet | ||||||
| Total Assets | 2.59B | 2.42B | 2.33B | 1.66B | 1.65B | 1.66B |
| Cash, Cash Equivalents and Short-Term Investments | 343.87M | 378.81M | 589.14M | 58.41M | 67.75M | 56.92M |
| Total Debt | 820.55M | 794.66M | 891.36M | 268.75M | 315.03M | 435.07M |
| Total Liabilities | 1.10B | 1.04B | 1.12B | 519.57M | 608.50M | 705.82M |
| Stockholders Equity | 1.49B | 1.38B | 1.20B | 1.14B | 1.04B | 958.58M |
Cash Flow | ||||||
| Free Cash Flow | 225.80M | 182.76M | 108.45M | 69.26M | 119.29M | 115.99M |
| Operating Cash Flow | 239.96M | 220.80M | 145.15M | 114.29M | 147.23M | 165.27M |
| Investing Cash Flow | -503.10M | -368.65M | -175.35M | -57.40M | -37.16M | -58.65M |
| Financing Cash Flow | -45.14M | -60.01M | 559.27M | -60.26M | -98.44M | -95.71M |
Merit Medical Systems Technical Analysis
Negative
83.59
Price Trends
86.61
Negative
90.67
Negative
95.81
Negative
Market Momentum
-1.23
Positive
38.85
Neutral
16.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMSI, the sentiment is Negative. The current price of 83.59 is below the 20-day moving average (MA) of 88.13, below the 50-day MA of 86.61, and below the 200-day MA of 95.81, indicating a bearish trend. The MACD of -1.23 indicates Positive momentum. The RSI at 38.85 is Neutral, neither overbought nor oversold. The STOCH value of 16.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MMSI.
Merit Medical Systems Risk Analysis
Merit Medical Systems disclosed 38 risk factors in its most recent earnings report. Merit Medical Systems reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Merit Medical Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $4.95B | 42.45 | 8.60% | ― | 10.14% | 0.04% | |
76 Outperform | 2.09B | 44.80 | 12.99% | 0.82% | 14.11% | 23.98% | |
73 Outperform | 5.43B | 28.87 | 1.63% | 1.11% | 1.11% | -23.73% | |
66 Neutral | 7.35B | 50.06 | 9.63% | 0.23% | 5.95% | 7.73% | |
57 Neutral | 5.40B | -19.72 | -6.23% | ― | 8.81% | 40.43% | |
53 Neutral | 3.26B | -86.59 | -1.75% | ― | 2.95% | 47.92% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
MMSI
Merit Medical Systems
83.59
-16.41
-16.41%
ICUI
ICU Medical
131.87
-43.17
-24.66%
LMAT
Lemaitre Vascular
92.29
1.65
1.82%
TFX
Teleflex
122.84
-119.66
-49.34%
STVN
Stevanato Group
26.93
7.43
38.10%
BLCO
Bausch + Lomb Corporation
15.25
-4.23
-21.71%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.