Have you been paying attention to shares of Merit Medical (MMSI)? Shares have been on the move with the stock up 12.7% over the past month. The stock hit a new 52-week high of $109.04 in the previous session. Merit Medical has gained 12.7% since the start of the year compared to the -0.6% move for the Zacks Medical sector and the 8.6% return for the Zacks Medical - Dental Supplies industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 30, 2024, Merit Medical reported EPS of $0.86 versus consensus estimate of $0.8.

For the current fiscal year, Merit Medical is expected to post earnings of $3.73 per share on $1.35 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $4.14 per share on $1.47 billion in revenues. This represents a year-over-year change of 10.86% and 8.6%, respectively.

Valuation Metrics

Merit Medical may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Merit Medical has a Value Score of C. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 29.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.4X. On a trailing cash flow basis, the stock currently trades at 22.6X versus its peer group's average of 17.6X. Additionally, the stock has a PEG ratio of 2.44. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Merit Medical currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Merit Medical fits the bill. Thus, it seems as though Merit Medical shares could still be poised for more gains ahead.

How Does MMSI Stack Up to the Competition?

Shares of MMSI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Cardinal Health, Inc. (CAH). CAH has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of A.

Earnings were strong last quarter. Cardinal Health, Inc. beat our consensus estimate by 14.63%, and for the current fiscal year, CAH is expected to post earnings of $7.84 per share on revenue of $220.88 billion.

Shares of Cardinal Health, Inc. have gained 8% over the past month, and currently trade at a forward P/E of 16.3X and a P/CF of 12.12X.

The Medical - Dental Supplies industry may rank in the bottom 54% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for MMSI and CAH, even beyond their own solid fundamental situation.

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