Inari Medical, Inc. NARI is well-poised for growth, backed by a huge market opportunity for its products and its commitment to understanding the venous system. However, its dependency on the adoption of products is concerning.
Shares of this currently Zacks Rank #3 (Hold) company have lost 21.3% in the past year against the industry's 11% growth. The S&P 500 Index has risen 25.4% in the same time frame.
NARI, with a market capitalization of $2.37 billion, is a commercial-stage medical device company. It seeks to develop products for treating and changing the lives of patients suffering from venous diseases.
The company's negative earnings yield of 0.8% compares favorably with the industry's (-5.8%). It delivered a trailing four-quarter average earnings surprise of 203.73%.
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What's Driving NARI's Performance?
Inari Medical is spearheading the creation and commercialization of devices that are purposefully built, keeping in mind the specific characteristics of the venous system, its diseases and unique clot morphology. The company's in-depth knowledge of its target market and commitment to understanding the venous system allowed it to figure out the unmet needs of patients as well as physicians. This, in turn, has enabled NARI to quickly innovate and improve its products while updating its clinical and educational programs.
In November 2023, NARI acquired and launched LimFlow, a pioneer in limb salvage for patients with chronic limb-threatening ischemia (CLTI). The minimally-invasive LimFlow System is designed to bypass blocked arteries in the leg and deliver oxygenated blood back into the foot via the veins in no-option CLTI patients who are facing major amputation and have exhausted all other therapeutic options. LimFlow recently received FDA's approval for its Transcatheter Arterialization of Deep Veins system. The acquisition adds a highly differentiated growth platform to Inari Medical's portfolio that is likely to provide multiple opportunities for expansion, including so in CLTI patient population.
In June, Inari Medical launched two new purpose-built products — the RevCore thrombectomy catheter and the Triever16 Curve catheter.
RevCore is currently the first mechanical thrombectomy device, designed to address venous in-stent thrombosis. Triever16 Curve is the latest addition to NARI's FlowTriever platform.
The latest launches are expected to significantly solidify the company's foothold in the Venous Stent Thrombosis and Venous Thromboembolism (VTE) treatment space globally.
In May, NARI announced the planned enrollment of the PEERLESS II trial, its third randomized controlled trial (RCT) in VTE. PEERLESS II is a prospective global, multi-center RCT, comparing the outcomes of intermediate-risk pulmonary embolism patients treated with the FlowTriever system versus anticoagulation alone. Strong procedural growth across both its product lines, ClotTriever and FlowTriever, continued to drive the company's top line in 2023, a trend that is likely to be reflected in 2024.
Moreover, NARI has expanded its product portfolio with new launches this year. It continues to progress well with the launch of Protrieve and InThrill. Continued adoption of FlowSaver — a device designed to be used with the FlowTriever System to reduce blood loss — will boost European sales.
During the second quarter, the company launched two new products — RevCore and T16 Curve — targeting patients with venous thromboembolism. These launches look promising for NARI's long-term growth.
During fourth-quarter 2023, net sales were $132.1 million, indicating a 22.6% increase from the year-ago reported figure. Revenues were driven by higher demand for VTE procedures. Moreover, the company's new therapies have been gaining adoption among patients. A strong demand in international markets also contributed to sales growth in the quarter.
What's Weighing on the Stock?
Most of NARI's product sales come from a limited number of hospitals. The company's growth and profitability mainly depend on its ability to boost awareness of its products among physicians and patients. These also depend on how keen physicians and hospitals are to adopt its products and perform catheter-based thrombectomy procedures on patients suffering from venous thromboembolism.
Inari Medical's inability to validate the benefits of its products and catheter-based thrombectomy procedures will result in limited adoption of the same. Moreover, it might not happen as quickly as expected. These factors, in unison, might negatively impact NARI's business and financial condition.
Estimates Trend
The Zacks Consensus Estimate for the company's revenues is pegged at $587.7 million for 2024, indicating a 19.1% increase from the previous year's reported number. The bottom-line estimate is pinned at a loss of 32 cents, implying a 346.2% decline from that recorded a year ago. However, earnings are expected to improve 213.5% in 2025.
Inari Medical, Inc. Price
Inari Medical, Inc. Price
Inari Medical, Inc. price | Inari Medical, Inc. Quote
Stocks to Consider
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, Cardinal Health, Inc. CAH and Cencora COR.
DaVita, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.1%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 35.6%. You can see the complete list of today's Zacks #1 Rank stocks here.
DaVita's shares have risen 67.4% compared with the industry's 22.4% growth in the past year.
Cardinal Health, carrying a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.
CAH's shares have risen 51.6% compared with the industry's 14% growth in the past year.
Cencora, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 9.8%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.7%.
Cencora's shares have rallied 53.2% in the past year compared with the industry's 1.1% growth.
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