Bull of the Day: MiMedx (MDXG)
Today’s Bull of the Day comes from biomedical/genetics industry that currently ranks in the Top 22% of our Zacks Industry Rank. If you’re looking for innovation and trying to find a company with great revenue growth poised to stick around for the long run, this is a stock you need to pay attention to.
MiMedx Group, Inc. (MDXG) is an integrated developer, processor and marketer of patent protected regenerative biomaterial products and bioimplants processed for human amniotic membrane. In English, they are a regenerative medicine company. They have technology that helps the healing process after surgery and trauma. Their PURION processed allografts enhance healing, reduce scar tissue, reduce inflammation and are immunologically privileged. Backed by proven clinical results, PURION has a 5 year shelf life when stored at ambient conditions.
The growth for MiMedx has been consistent over the last several years and the company feels they can sustain this growth for 2015 and beyond. For twelve consecutive quarters, MDXG has met or exceeded quarterly guidance. The company seeks to continue its market expansion in advanced wound care with EpiFix. It looks to continue expansion into more than 40 different acute and chronic would care procedures. Also, DFU/VLU/Pressure Ulcer patient procedure market growth offers a large opportunity as it accounted for less than 5% of the US market in 2014 and looks to become increasingly larger in the coming years.
Also, MiMedx is looking for surgical application expansion of its AmnioFix product. Spinal procedure penetration should increase in 2015 due to Medtronic distribution. Also, an expansion of OEM customer base in orthopedics as well as plastic surgery expansion should help MiMedx revenue growth. MiMedx has recognized a $13 billion opportunity in the US market alone for their products.
Analysts have been impressed with the growth potential for MDXG. Over the last 60 days, two analysts have raised their estimates for the current year and next year. For this year, consensus estimates have jumped from analysts looking for the company to breakeven to 0.05. The jump for next year is even more bullish with consensus rising from 11 cents per share to 18 cents. This jump, coupled with the recent earnings surprise history are a big reason for the Zacks Rank #1 (Strong Buy).
The stock price has been reacting to the bullish estimates as well. After trading below $5 in May, MDXG popped up above its 20 day exponential moving average to start June. The next bull run took the stock near $7.50 before setting up a consolidation period that lasted a few months. As the market bottomed in mid-October, MDXG started to take off again. The stock rose up from $7 all the way near $12 in one fell swoop. Since testing $12 the stock has come back nicely the last few days, all the while above its 20 day EMA, and is looking for the next leg higher.
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