December 28, 2023
Top 10 Stock Merit Medical Systems Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Merit Medical Systems – Top 10 Stock in Dow Jones U.S. Medical Equipment Index
Merit Medical Systems is listed as a top 10 stock on December 28, 2023 in the market index D.J. US Medical because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for Merit Medical Systems on December 28, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Supplies |
| Index | NASDAQ, D.J. US Medical |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Merit Medical Systems Strong Buy
| 360 METRICS | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 81 |
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| SENTIMENT | ||||||||
| SENTIMENT | 91 |
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| 360° VIEW | ||||||||
| 360° VIEW | 84 |
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ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Merit Medical Systems are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Merit Medical Systems. The consolidated Sentiment Rank has a good rank of 91, which means that professional investors are more optimistic about the stock than for 91% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 81 or better than 81% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 31, meaning that the share price of Merit Medical Systems is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 35. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, Merit Medical Systems is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 91) and safe financing practices (Safety Rank of 81), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Merit Medical Systemṣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Merit Medical Systems very positive
ANALYSIS: With an Obermatt Sentiment Rank of 91 (better than 91% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Merit Medical Systems is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Merit Medical Systems. Analyst Opinions are at a rank of 70 (better than 70% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 69, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Merit Medical Systems. The Professional Investors rank is 80, which means that currently, professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 58 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 58% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 91 (more positive than 91% compared with investment alternatives), Merit Medical Systems has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Merit Medical Systems stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Merit Medical Systems Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), Merit Medical Systems shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Merit Medical Systems. Price-to-Sales (P/S) is 52, which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value concerning Merit Medical Systems's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 52% of alternatives (48% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 46, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on Merit Medical Systems's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Merit Medical Systems may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Merit Medical Systems Growth Momentum low
| GROWTH METRICS | December 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 42 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 56 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 29 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 59 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 35 |
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ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Merit Medical Systems shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Merit Medical Systems. Profit Growth has a rank of 56, which means that currently professionals expect the company to grow its profits more than 56% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has a below the median rank of 42, which means that, currently, professionals expect the company to grow less than 58% of its competitors, and Capital Growth also has a lower rank of 29. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Merit Medical Systems. ...read more
Safety Strategy: Merit Medical Systems Debt Financing Safety very solid
| SAFETY METRICS | December 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 60 |
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| REFINANCING | ||||||||
| REFINANCING | 33 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 87 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 81 |
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ANALYSIS: With an Obermatt Safety Rank of 81 (better than 81% compared with alternatives) for 2023, the company Merit Medical Systems has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Merit Medical Systems is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Merit Medical Systems. Leverage is at a rank of 60, meaning the company has a below-average debt-to-equity ratio. It has less debt than 60% of its competitors. Liquidity is also good at a rank of 87, meaning the company generates more profit to service its debt than 87% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 33, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 67% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 81 (better than 81% compared with alternatives), Merit Medical Systems has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Merit Medical Systems. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Merit Medical Systems Below-Average Financial Performance
| COMBINED PERFORMANCE | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 87 |
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| COMBINED | ||||||||
| COMBINED | 47 |
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ANALYSIS: With an Obermatt Combined Rank of 47 (worse than 53% compared with investment alternatives), Merit Medical Systems (Health Care Supplies, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Merit Medical Systems are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 81), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 47, is a hold recommendation based on Merit Medical Systems's financial characteristics. As the company Merit Medical Systems's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 31) and low growth (Obermatt Growth Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 81) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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