Is This Med-Tech Stock Ready to Breakout?

Medtronic

The medical technology sector has weathered the COVID-19 crisis better than many other industries. So let’s take a closer look at one of the largest companies in this sector: Medtronic (NYSE:MDT). The company is the market leader for cardiac pacemakers, with a market share of more than 50%. Medtronic also manufactures medical technology for spine and vascular surgery, neurology, and diabetes. Annual sales are around $33 billion.

With its latest quarterly figures for the last quarter of the 2020/2021 fiscal year, Medtronic did impress. The company increased its sales by a remarkable +37% to $8.2 billion. At the same time, earnings almost tripled from $0.58 to $1.50 per share. Both figures were above average analyst forecasts. In addition, Medtronic benefited from catch-up effects due to postponed operations in previous quarters.

The Future is Medtronic

Also encouraging: the new Hugo robotic surgical system generated sales outside the U.S. for the first time. The surgical robot is one of Medtronic’s greatest hopes and could further boost the pace of growth in the coming years. Medtronic also took a step forward in other new products or products under development in Q1 2021. Some examples:

  • Medtronic received approval in the U.S. for the first GI Genius intelligent endoscopy module. The system uses artificial intelligence to identify colorectal cancer – the world’s third most common cancer. 
  • The U.S. Food and Drug Administration approved Medtronic’s next generation of its charge-free spinal cord stimulation platform.
  • Medtronic has received an approval extension for its cardiac cryoablation catheters, which may now be used for the initial treatment of so-called recurrent symptomatic paroxysmal atrial fibrillation.
  • The U.S. Food and Drug Administration gave the green light for using the new transcatheter pulmonary valve replacement for patients with congenital heart disease.
  • Medtronic launched sales of its SonarMed respiratory monitoring system for infants. The first device of its kind, the system, uses acoustic technology to check for specific safety risks in real-time.

Sales and Profit Records

For several quarters now, Medtronic has been feeling solid tailwinds. As a result, the days when hospitals postponed surgeries to create capacity for COVID-19 patients are essentially over – especially in the critical U.S. market. In the current fiscal year, the Group will set new records for sales and profits, which will be far higher than before the pandemic. This is also reflected in the share price, which has now climbed to a new all-time high.

And thanks to its numerous innovative new products, Medtronic should continue to grow in the coming years. Although certainly not at the current pace, growth rates in the high single-digit percentage range should always be possible. Medtronic is certainly worth a closer look if you are looking for a solid stock with above-average potential.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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