Conestoga Capital Advisors, LLC on Merit Medical Systems, Inc.
Thesis
Merit Medical is seeing accelerating demand for interventional and diagnostic medical devices after a difficult beginning of the year. Organic growth rose to 9% from 4%, its fastest quarterly pace in three years. Management lifted revenue and earnings expectations while acquisitions and new product introductions expanded the therapeutic portfolio. Conestoga views this as evidence of strengthening operating momentum.
“organic revenue growth accelerated to 9% from 4%, its strongest quarterly rate in three years”
Key risks
- The recovery follows a difficult first quarter and could prove uneven.
- Successful product launches and integration of acquisitions are needed to maintain growth.
- Premium growth-stock valuations are vulnerable to rising interest rates.