Reasons to Retain Inari Medical (NARI) in Your Portfolio Now
Zacks Equity Research
5 min read
Inari Medical, Inc. NARI is well-poised for growth, backed by a huge market opportunity for products and its commitment to understand the venous system. However, its dependency on the adoption of products is concerning.
Shares of this Zacks Rank #3 (Hold) company have lost 7.5% year to date compared with the industry’s 12.6% decline. The S&P 500 Index has risen 15.9% in the same time frame.
NARI, with a market capitalization of $3.23 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.
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The company’s earnings yield of 0.1% compares favorably with the industry’s (10.4%). Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 82.16%.
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 understand the venous system have 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, NARI acquired 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 approval for its Transcatheter Arterialization of Deep Veins system. The acquisition adds a highly differentiated growth platform to Inari Medical’s platform that is likely to provide multiple opportunities for expansion, including expansion 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 (PE) patients treated with the FlowTriever system versus anticoagulation alone. Strong procedural growth across both its product lines, ClotTriever and FlowTriever, continues to drive the company’s top line in the first half of 2023, a trend that is likely to be reflected in the second-half results.
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. The launch of new products looks promising for NARI’s long-term growth.
The company reported total revenues of $126.4 million for the third quarter, indicating a 31.4% improvement year over year.It expanded its territories to more than 275 in 2022.
Inari Medical expects total revenues in the range of $490-$493 million for 2023, indicating growth of approximately 27.8-28.6% from the previous year’s reported actual.
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.
Inari Medical, Inc. Price
Inari Medical, Inc. Price
Inari Medical, Inc. price | Inari Medical, Inc. Quote
Estimates Trend
The Zacks Consensus Estimate for the company’s revenues is pegged at $491.8 million for 2023, indicating a 28.2% increase from the previous year’s reported number. The bottom-line estimate is pinned at 6 cents per share, implying a 110.9% improvement from that recorded a year ago. The same has improved to 6 cents in 2023 from 4 cents in 2022 in the past 60 days.
Stocks to Consider
Some better-ranked stocks from the same medical industry are Cardinal Health CAH, Biodesix BDSX and Patterson Companies PDCO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has an estimated long-term growth rate of 15.2%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.67%.
CAH’s shares have rallied 35.4% year to date.
Biodesix has an estimated growth rate of 22.7% for 2024. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 9.76%.
BDSX’s shares have lost 44.8% year to date.
Patterson Companies has an estimated long-term growth rate of 9.2%. PDCO’s earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 8.47%.
PDCO’s shares have risen 8.8% year to date.
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