Haemonetics Corporation’s HAE impressive Hospital business recovery is poised to drive growth in the upcoming quarters. The robust uptake of the NexSys PCS system bodes well for its long-term growth. Strong financial stability also buoys optimism. Meanwhile, a dull macroeconomic scenario and unfavorable foreign exchange remain concerns for HAE’s operations.
In the past year, this Zacks Rank #3 (Hold) company’s shares have lost 14.5% against the industry and the S&P 500 composite’s growth of 9% and 10%, respectively.
The global provider of blood and plasma supplies and services has a market capitalization of $3.26 billion. HAE beat on earnings in three of the trailing four quarters and missed once, delivering an average surprise of 1.01%.
Let us delve deeper.
Haemonetics’ Key Upsides
Hospital Business Recovery Continues: The Hospital business remains well-positioned to maintain its strong growth, supported by dynamic market conditions.
In the third quarter of fiscal 2025, the Hospital business achieved a 24% increase in revenues. Blood Management Technologies witnessed strong momentum, driven by sustained market growth, share gains and price benefits across the portfolio. Transfusion management achieved double-digit growth, driven by new account openings in North America and EMEA, as well as ongoing customer upgrades to the latest version of SafeTrace Tx.
The Interventional Technologies business also grew 47% in the fiscal third quarter. The Vascular Closure business also contributed to the growth, largely driven by its VASCADE MVP and VASCADE MVP XL devices. The Enzo ETM esophageal cooling device, currently available across more than 200 accounts, is gaining positive feedback as a potentially strong alternative to emerging catheter-based technologies for treating atrial fibrillation.
NexSys PCS System Continues to Thrive: Haemonetics’ FDA-cleared NexSys PCS (plasma collection system) is developed to enable higher plasma yield collections, improve productivity in customers’ centers, enhance the overall donor experience, and provide safe and reliable collections that will become life-changing medicines for patients. The new, proprietary Persona Technology strengthens the NexSys PCS value proposition and reinforces the company’s commitment to supporting its Plasma customers.
The rollout of Persona, its proprietary technology proven to increase yield by 9% to 12% on average, continues to gain momentum with more than 40 million collections. In addition, the continued transition from the company’s PCS2 devices to the latest NexSys with Persona Technology will drive meaningful improvements in 2025.
Haemonetics’ Key Downsides
Economic Uncertainty a Concern: The ongoing global geopolitical constraints are materially affecting the company’s operational results. Despite implementing cost containment measures, selective price increases and other actions to offset these inflationary pressures in its global supply chain, the company sometimes is unable to offset all the increases in operational costs completely. Added to this, climate change could increase supply costs, including energy and transportation/freight-related expenses, or reduce the availability of raw materials. In the past nine months, the company’s cost of goods sold increased 5.4% year over year.
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Competitive Landscape: Haemonetics operates in a very competitive environment for manual and automated systems. Slower-than-expected product adoption by customers, especially the American Red Cross, might reduce the company’s revenues and profit.
HAE’s Estimate Trend
The Zacks Consensus Estimate for fiscal 2025 earnings has moved south 0.2% to $4.54 per share in the past 30 days.
The consensus estimate for fiscal 2025 revenues is pegged at $1.39 billion, which indicates a 6.2% increase from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Cardinal Health CAH.
Phibro Animal Health has an estimated fiscal 2025 earnings growth rate of 62.2% compared with the industry’s 17.2%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.06%. Its shares have surged 68.2% compared with the industry’s 12.5% growth in the past year.
PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boston Scientific, carrying a Zacks Rank #2 at present, has an earnings yield of 2.7% compared with the industry’s 1.5%. Shares of the company have rallied 56.9% compared with the industry’s 12.5% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 10.7% compared with the industry’s 9.5%. Shares of the company have rallied 15.9% against the industry’s 4.1% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.64%.
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