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On Friday, Needham analysts adjusted their outlook on Merit Medical Systems , Inc. (NASDAQ:MMSI), decreasing the price target to $100.00 from the previous $116.00. Despite the reduction, they reaffirmed a Buy rating on the company’s shares. The adjustment followed Merit Medical (TASE:BLWV)’s first-quarter 2025 earnings report, which surpassed consensus estimates for both revenue and earnings per share (EPS). The medical device company, currently valued at $5.59 billion, trades at a P/E ratio of 49.48, suggesting a premium valuation according to InvestingPro analysis.
Merit Medical’s management has kept its 2025 revenue forecast unchanged but revised its EPS guidance downward, citing the impact of tariffs. The company also confirmed its expected sales for WRAPSODY, which are projected to be between $7 million and $9 million in 2025. Organic revenue growth remained consistent, recorded at 6.0% year-over-year in the first quarter of 2025, compared to 6.1% in the fourth quarter of 2024. This aligns with the company’s historical performance, as InvestingPro data shows a 7.89% revenue growth over the last twelve months. For deeper insights into Merit Medical’s growth metrics and 11 additional ProTips, consider exploring InvestingPro’s comprehensive analysis.
The company experienced a notable increase in gross margin, which was up 250 basis points year-over-year to 47.43%, and operating margin, which improved by 230 basis points compared to the same period last year. Free cash flow for the first quarter was reported at $20 million, a slight decrease from the $25 million generated in the first quarter of the previous year. The company maintains strong financial health with a comfortable current ratio of 4.27, indicating robust liquidity.
Needham analysts expressed confidence in Merit Medical’s operational performance, anticipating continued robust revenue growth, margin expansion, and strong free cash flow. While the impact of tariffs on EPS was recognized as disappointing, the analysts suggested that any potential reduction in China tariff rates could alleviate this headwind.
The revised price target of $100 by Needham reflects a more cautious EPS outlook for 2026, taking into account the current tariff-related challenges faced by Merit Medical. Despite the tariff concerns, the firm’s overall execution and strategic direction have led to the retention of the Buy rating.
In other recent news, Merit Medical Systems Inc. reported strong financial results for the first quarter of 2025, surpassing analysts’ expectations. The company posted an earnings per share (EPS) of $0.86, exceeding the forecast of $0.75, and reported revenue of $355.4 million, slightly above the anticipated $352.52 million. Revenue grew by 9.8% year-over-year, driven by a 9% increase in cardiovascular segment sales and a 64% rise in the endoscopy segment. Despite these positive results, Merit Medical’s stock experienced a decline in aftermarket trading, which may reflect concerns over challenges in the Chinese market, where sales decreased by 10%. The company is actively working on strategies to mitigate the impact of tariffs, particularly in China, which accounts for a significant portion of the tariff-related costs. Merit Medical has maintained a positive outlook for 2025, forecasting revenue growth between 8-10% and updating its non-GAAP EPS guidance to a range of $3.29-$3.42. The firm Piper Sandler noted investor focus on the tariff topic, while Wells Fargo (NYSE:WFC) analysts inquired about demand in the Chinese market amid geopolitical tensions.
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