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Investing.com -- Shares of Medacta surged by 9% following the release of its unaudited fiscal year 2024 top-line figures, which exceeded consensus estimates. The company reported total revenue of €591 million, surpassing the Visible Alpha consensus (VA cons.) of €584 million and showing a currency-adjusted (cc) growth of 16.2%, which is higher than both the company’s forecast (SFe) of 15.0% and the VA cons. of 15.2%.
The second half of FY-24 was particularly robust for Medacta, with revenue growth at 18.1% on a cc basis, outpacing the guidance of 13-15%. The growth was driven by notable performances in the Knee and Spine/Extremities segments. The Knee business, led by GMK SpheriKA, and the Spine/Extremities division, supported by NextAR planning workflows, were standout contributors to this growth.
Geographically, all regions performed ahead of estimates, with the EMEA region standing out due to Medacta’s already strong market share there. The product mix aligned with expectations from the Capital Markets Day, with traditional drivers like the Anterior Hip continuing to contribute to top-line growth, albeit at a slower pace compared to the Knee segment.
Looking ahead, the company is expected to issue its long-term, constant currency (LDD cFX) FY25 top-line growth guidance at the full-year report on March 25.
Stifel analysts commented, "We expect LDD cFX FY25 top-line growth guide will be issued at the FY on 25 March." This anticipation aligns with the company’s tradition of providing guidance at the fiscal year-end.
For FY25, analysts forecast an organic growth of 13.1% and expect Medacta to guide for LDD in FY25e. Momentum in the Knee segment is seen as a potential driver for growth above the relatively modest estimates of 14.0%/13.0% for cFX FY25e Knee, following a 25.2% cc growth in the second half of FY24. In the Spine segment, there is also potential for a positive surprise, although this seems broadly reflected in the estimates.
Analysts project limited margin expansion for FY25 but note several factors that could drive margin improvement in FY25/FY26, including a direct sales force in the US Spine market, a potential foreign exchange tailwind from the US if tariffs remain contained, and operating leverage from the Extremities segment.
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