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Philips' (PHG) SmartCT 3D-Imaging Software Gets FDA Approval

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Zacks Equity Research
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Koninklijke Philips PHG recently announced that its SmartCT application software, which is a key component of the AzurionImage Guided Therapy System, has been granted 510 (k) clearance by the U.S. FDA.

SmartCT includes software applications for angiography, neurology, soft-tissue imaging and guidewire/catheter navigation. The application also supports treatment of aneurysms, vascular diseases and liver tumors.

SmartCT software provides CT-like 3D images that help in proper diagnosis, therapy planning, treatment and follow-up for interventional radiology procedures. The software allows interventionalists to take total control of the Azurion platform through a touchscreen tablet situated alongside the interventional radiology table, thereby supporting faster and better-informed decision making.

The latest FDA approval expands the capability of AzurionImage Guided Therapy System, which is a part of Philips Diagnosis & Treatment business. While the segment accounted for 41.8% of sales in 2020, Image-Guided Therapy accounted for 32% of segment sales.

Koninklijke Philips N.V. Price and Consensus

Koninklijke Philips N.V. Price and Consensus
Koninklijke Philips N.V. Price and Consensus

Koninklijke Philips N.V. price-consensus-chart | Koninklijke Philips N.V. Quote

Markedly, Philips is gradually evolving as a healthcare company. The company is presently focusing on key opportunities in population health management, while improving its enterprise-wide solutions for health systems, and collaborating with healthcare organizations to enhance its stronghold in the healthcare industry.

Philips benefits from strong demand for patient monitors, hospital ventilators, radiology informatics, computed tomography, X-ray and portable ultrasound systems.

Additionally, increased interest in telehealth solutions like tele-ICU, tele-radiology, tele-pathology and tele-dentistry services, which help virtual working and collaboration of healthcare professionals, bode well for Philips. Moreover, a widening product portfolio and an expanding partner base aid recurring revenue growth.

Further, recent acquisitions of BioTelemetry and Capsule Technologies are expected to drive growth in the long haul. The addition of BioTelemetry’s cardiac diagnostics and monitoring solutions with Philips’ existing portfolio, which includes real-time patient monitoring, therapeutic devices, telehealth and informatics, expands Philips’ cardiac care portfolio.

The Capsule Technologies buyout expands Philips’ total addressable market and customer base. Moreover, it will add more than $100 million to Philips’ top line in terms of SaaS and licensing revenues. In fact, the buyout is expected be accretive to Philips’ sales growth and adjusted EBITA margin in 2021.

However, Philips’ shares have underperformed the Zacks Electronics - Miscellaneous Products industry year to date. The shares have retuned 7.9% compared with industry’s rally of 11.7%.

The underperformance can be attributed to uncertainty related to COVID-19 pandemic. The company’s 2021 top line is expected to be negatively impacted by lower Connected Care sales. However, solid growth in Diagnosis & Treatment and Personal Health is expected to help Philips deliver low-single-digit comparable sales growth.

Zacks Rank & Stocks to Consider

Philips currently has a Zacks Rank #4 (Sell).

Universal Electronics UEIC, Mistras Group MG and Flex FLEX are better-ranked stocks in the same industry. While Universal Electronics sports a Zacks Rank #1 (Strong Buy), both Mistras and Flex carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Universal Electronics, Mistras Group and Flex is pegged at 15%, 29.7% and 13.3%, respectively.

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Koninklijke Philips N.V. (PHG) : Free Stock Analysis Report

Flex Ltd. (FLEX) : Free Stock Analysis Report

Universal Electronics Inc. (UEIC) : Free Stock Analysis Report

Mistras Group Inc (MG) : Free Stock Analysis Report

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