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Merit Medical Systems (MMSI)
NASDAQ:MMSI
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Merit Medical Systems (MMSI) AI Stock Analysis

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MMSI

Merit Medical Systems

(NASDAQ:MMSI)

Rating:66Neutral
Price Target:
$91.00
▲(6.98%Upside)
Merit Medical Systems' strong financial performance and strategic acquisitions are key strengths, but bearish technical indicators and valuation concerns weigh down the score. The company's positive guidance and corporate events support a cautiously optimistic outlook.
Positive Factors
Financial Performance
Merit Medical's Q2 revenue is expected to beat Street expectations by 3% at the midpoint.
Leadership
The appointment of Martha Aronson as the new CEO should alleviate investor concerns about leadership succession.
Revenue Growth
Preliminary Q2 sales beats consensus by approximately $10M.
Negative Factors
Leadership Experience
The announcement does come as a surprise because Ms. Aronson has been away from a formal revenue-generating, operational role for 10 years.
Regulatory Challenges
CMS did not award Merit’s Wrapsody with transitional pass-through payment (TPT), which could justify premium pricing and higher revenues.
Reimbursement
MMSI has had mixed results seeking higher reimbursement with an inpatient new technology add-on payment likely and an outpatient transitional pass-through payment unlikely.

Merit Medical Systems (MMSI) vs. SPDR S&P 500 ETF (SPY)

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 Systems makes money primarily through the sale of its medical devices and products to healthcare providers, hospitals, and clinics worldwide. The company generates revenue by manufacturing and distributing a wide range of medical devices used in interventional and diagnostic procedures. Key revenue streams include the sale of disposable medical devices and capital equipment. Significant factors contributing to its earnings include its extensive portfolio of innovative products, a strong global distribution network, and strategic partnerships with healthcare providers. Additionally, Merit Medical invests in research and development to continually enhance its product offerings and maintain a competitive edge in the medical device industry.

Merit Medical Systems Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: -10.15%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and improved operating margins, with notable performance in the U.S. market and the Cardiovascular segment. However, significant challenges were presented by the impact of tariffs, especially in China, leading to reduced EPS guidance for the year. The company remains optimistic but is navigating a complex macroenvironment.
Q1-2025 Updates
Positive Updates
Revenue Growth Exceeds Expectations
Total revenue for Q1 2025 was $355.4 million, up 9.8% year-over-year on a GAAP basis and 10.9% on a constant currency basis, surpassing growth expectations.
Significant Improvement in Operating Margin
Non-GAAP operating margin increased nearly 230 basis points year-over-year to 19.3%, setting a first-quarter record for the company.
Strong Growth in Cardiovascular and OEM Segments
Cardiovascular segment grew by 9% and OEM products sales increased by 21% in Q1 2025.
Positive U.S. Market Performance
U.S. sales increased 14% on a constant currency basis, exceeding expectations by 170 basis points.
Free Cash Flow Guidance Reaffirmed
The company expects to generate at least $150 million in free cash flow for the fiscal year 2025.
Negative Updates
Tariff Impact on Earnings
Projected impact of tariffs expected to increase costs by $26.3 million, primarily affecting business in China.
Decline in China Sales
Sales in China decreased by 10%, attributed to the broader macroenvironment.
Lowered Non-GAAP EPS Guidance
Non-GAAP EPS guidance for 2025 reduced from $3.58-$3.70 to $3.29-$3.42 due to tariff impacts.
Challenges in Endoscopy Segment
Endoscopy segment growth was flat year-over-year on an organic basis.
Decreased Free Cash Flow in Q1
Free cash flow was $19.5 million in Q1 2025, a 20% decrease year-over-year due to increased capital expenditures.
Company Guidance
During the Merit Medical Systems First Quarter 2025 Earnings Conference Call, guidance for the fiscal year 2025 was provided. The company expects total net revenue growth on a GAAP basis to range from 8% to 10% year-over-year, with the Cardiovascular segment projected to grow by 7% to 9% and the Endoscopy segment by 34% to 37%. The guidance includes a foreign currency headwind of approximately $4.9 million. On a constant currency basis, revenue growth is anticipated to be between 8.7% and 10.2%. Non-GAAP EPS is forecasted to be $3.29 to $3.42, adjusted from the initial $3.58 to $3.70, primarily due to tariffs and trade policies, which are expected to increase cost of goods sold by $26.3 million, mostly affecting business in China. Despite these challenges, the company maintains a strong outlook with expected non-GAAP operating margins of 17.6% to 18% and free cash flow of at least $150 million for the year.

Merit Medical Systems Financial Statement Overview

Summary
Merit Medical Systems has shown robust revenue growth and improved profitability, with a significant increase in gross and net profit margins. The balance sheet is solid, though increased leverage poses a risk. Cash flow management is strong, supporting strategic needs. Overall, the financials reflect a compelling profile, but margin sustainability and debt management should be monitored.
Income Statement
85
Very Positive
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.
Balance Sheet
75
Positive
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.
Cash Flow
80
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.36B1.26B1.15B1.07B963.88M
Gross Profit643.33M583.87M519.10M485.33M401.18M
EBITDA297.60M231.44M181.15M153.45M102.71M
Net Income120.36M94.41M74.52M48.45M-9.84M
Balance Sheet
Total Assets2.42B2.33B1.66B1.65B1.66B
Cash, Cash Equivalents and Short-Term Investments378.81M589.14M58.41M67.75M56.92M
Total Debt794.66M891.36M268.75M315.03M435.07M
Total Liabilities1.04B1.12B519.57M608.50M705.82M
Stockholders Equity1.38B1.20B1.14B1.04B958.58M
Cash Flow
Free Cash Flow182.76M108.45M69.26M119.29M115.99M
Operating Cash Flow220.80M145.15M114.29M147.23M165.27M
Investing Cash Flow-368.65M-175.35M-57.40M-37.16M-58.65M
Financing Cash Flow-60.01M559.27M-60.26M-98.44M-95.71M

Merit Medical Systems Technical Analysis

Technical Analysis Sentiment
Negative
Last Price85.06
Price Trends
50DMA
93.45
Negative
100DMA
95.54
Negative
200DMA
98.46
Negative
Market Momentum
MACD
-2.57
Positive
RSI
34.02
Neutral
STOCH
12.88
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 85.06 is below the 20-day moving average (MA) of 90.84, below the 50-day MA of 93.45, and below the 200-day MA of 98.46, indicating a bearish trend. The MACD of -2.57 indicates Positive momentum. The RSI at 34.02 is Neutral, neither overbought nor oversold. The STOCH value of 12.88 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 (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$6.69B49.679.08%0.01%2.84%-11.34%
67
Neutral
$3.11B-4.62%7.19%-56.19%
66
Neutral
$4.99B41.439.16%8.24%18.54%
63
Neutral
$5.18B36.953.48%1.16%0.29%-48.98%
61
Neutral
$8.95B116.65-23.93%-0.12%-713.82%
60
Neutral
HK$16.84B5.17-7.44%2.89%11.55%-28.15%
54
Neutral
$6.41B-1.16%4.88%-196.93%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MMSI
Merit Medical Systems
85.06
0.06
0.07%
ICUI
ICU Medical
129.01
4.54
3.65%
MASI
Masimo
165.00
55.22
50.30%
RGEN
Repligen
117.13
-15.23
-11.51%
TFX
Teleflex
117.24
-103.39
-46.86%
STVN
Stevanato Group
25.41
5.67
28.72%

Merit Medical Systems Corporate Events

M&A TransactionsBusiness Operations and Strategy
Merit Medical Acquires Biolife Delaware for $120 Million
Positive
May 20, 2025

On May 20, 2025, Merit Medical Systems acquired Biolife Delaware, L.L.C., a manufacturer of hemostatic devices, for approximately $120 million. This strategic acquisition is expected to enhance Merit’s product portfolio and contribute to its revenue growth, with projections of adding $18 million annually starting in 2026. The acquisition aligns with Merit’s goal of improving profitability and expanding its market reach, although it is anticipated to be slightly dilutive to the company’s 2025 financial performance due to transaction-related expenses.

The most recent analyst rating on (MMSI) stock is a Buy with a $93.00 price target. To see the full list of analyst forecasts on Merit Medical Systems stock, see the MMSI Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Merit Medical Systems Shareholders Approve Key Proposals
Positive
May 19, 2025

On May 14, 2025, Merit Medical Systems, Inc. held its Annual Meeting of Shareholders where shareholders voted on key proposals including the election of four directors, approval of executive compensation, and ratification of Deloitte & Touche LLP as the independent public accounting firm for 2025. All proposals were approved, indicating shareholder support for the company’s leadership and strategic direction.

The most recent analyst rating on (MMSI) stock is a Buy with a $93.00 price target. To see the full list of analyst forecasts on Merit Medical Systems stock, see the MMSI Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Merit Medical Systems Reports Q1 2025 Revenue Growth
Positive
Apr 24, 2025

Merit Medical Systems reported a revenue of $355.4 million for the first quarter of 2025, marking a 9.8% increase from the previous year. The company also updated its full-year guidance, reflecting confidence in strong execution and stable growth, despite the potential impacts of recent trade policies.

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.Date of analysis: Jul 17, 2025