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Here's Why You Should Add NuVasive (NUVA) to Your Portfolio

Zacks Equity Research

NuVasive, Inc. NUVA has been gaining investor confidence on consistently positive results. Over the past year, the company’s shares have outperformed its industry. The stock has gained 22.6% compared with 6.4% growth of its industry. Also, the company has outperformed the S&P 500’s 13.6% rise.

This renowned medical device provider, which specializes in developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine, has a market cap of $3.75 billion. The company’s five-year growth projection rate looks impressive at 10.9%. It is expected to scale new highs in the near term. It delivered average positive earnings surprise of 15.1% for the trailing four quarters.

With solid prospects, this Zacks Rank #2 (Buy) stock is a worthy investment choice right now.

Per our Style Score, NuVasive has a Growth Score of A, which is reflective of its strong potential. Our research shows that stocks with a Growth Style Score of A or B combined with a Zacks Rank #1 or 2 offer the best upside possibility.

What Makes the Stock an Attractive Pick?

Product Launches: We are particularly upbeat about NuVasive’s slew of recent product launches within in its spine business. These include Modulus XLIF and Modulus Cervical among others. The company is currently on track to launch more than a dozen products this year, spanning from solutions in core implant and fixation product lines to enabling technologies for supporting further adoption of minimally invasive surgery.

Within its Advanced Materials Science (AMS) portfolio, the company launched Modulus TLIF-A and Modulus TLIF-O porous titanium spine implants designed for the transforaminal lumbar interbody fusion (TLIF) procedure. It also introduced the X360 system integrated with Pulse for lateral single-position surgery.

Strong Growth in International Business: Investors are optimistic about NuVasive's robust international growth potential. In the last reported quarter, the company registered 13.4% international revenue growth at CER. The EMEA region witnessed a solid uptick, driven by substantial contribution from the United Kingdom and Spain. In Asia Pacific, despite several near-term challenges, Japan delivered sturdy topline growth. The company expects this momentum to continue in the fourth quarter as well.

Stable Liquidity: The company exited the third quarter of 2019 with cash and cash equivalents of $163.4 million compared with $128.4 million at the end of the second quarter. Year to date, net cash provided by operating activities totaled $160.6 million compared with $150.5 million a year ago.

Which Way Are Estimates Heading?

The estimate revision trend for the company’s current year is impressive. Over the past 30 days, the Zacks Consensus Estimate for earnings has moved 2.2% north to $2.37.

The Zacks Consensus Estimate for 2019 revenues is pegged at $1.16 billion, suggesting a 5.6% rise from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks from the broader medical space are Haemonetics Corporation HAE, Medtronic plc MDT and GW Pharmaceuticals plc GWPH.

Haemonetics currently has a Zacks Rank of 1 (Strong Buy) and a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medtronic has with a Zacks Rank #2 and a long-term earnings growth rate of 7.3%.

GW Pharmaceuticals estimates fourth-quarter earnings growth rate at 67.9%. It currently carries a Zacks Rank of 2.

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