LivaNova PLC (LIVN, Financial), a prominent player in the medical devices and instruments industry, has demonstrated a notable performance in the stock market recently. With a current market capitalization of $3.25 billion, the stock price of LivaNova has risen to $59.94, marking a 1.33% increase over the past week and an impressive 14.52% gain over the past three months. According to GuruFocus, the GF Value of LivaNova is currently $66.63, suggesting that the stock is modestly undervalued, a status consistent with its valuation three months ago.
Overview of LivaNova PLC
LivaNova PLC, headquartered in the UK, emerged from the merger of US-based Cyberonics and Italy's Sorin. The company specializes in cardiovascular and neuromodulation devices, including surgical heart valves and machines for heart-lung operations, as well as devices for treating epilepsy and depression. Post-merger, LivaNova streamlined its focus by divesting its cardiac rhythm management and heart valve businesses. The company earns approximately half of its revenue from the US, with another 21% from Europe, and the remainder from other global markets. 
Assessing Profitability
LivaNova's financial health shows mixed signals in terms of profitability. The company holds a Profitability Rank of 5/10. Its Operating Margin stands at 1.86%, which is better than 51.35% of its peers in the industry. The Return on Equity (ROE) is 1.42%, and the Return on Assets (ROA) is 0.75%, both metrics showcasing moderate performance relative to competitors. However, the Return on Invested Capital (ROIC) is slightly negative at -0.24%. Over the past decade, LivaNova has been profitable for three years, which is better than 23.2% of companies in its field. 
Growth Trajectory
The Growth Rank of LivaNova is 4/10. The company's 3-year revenue growth rate per share is 3.40%, outperforming 40.29% of global competitors. However, its 5-year revenue growth rate per share shows a decline of 2.20%. Looking ahead, analysts estimate a total revenue growth rate of 5.10% over the next 3 to 5 years, which is modest compared to industry standards. Notably, the EPS without NRI growth rate for the same future period is projected at an impressive 45.00%, ranking better than 95.83% of companies in the sector. 
Significant Shareholders
Among the notable shareholders, PRIMECAP Management (Trades, Portfolio) holds the largest stake with 5,791,280 shares, representing 10.75% of the company. Barrow, Hanley, Mewhinney & Strauss owns 2,372,027 shares (4.4%), and well-known investor David Einhorn (Trades, Portfolio) holds 1,229,316 shares, accounting for 2.28% of the shares.
Competitive Landscape
LivaNova operates in a competitive landscape with key players like TransMedics Group Inc (TMDX, Financial) with a market cap of $3.93 billion, PROCEPT BioRobotics Corp (PRCT, Financial) valued at $2.86 billion, and QuidelOrtho Corp (QDEL, Financial) with a market cap of $2.7 billion. These companies represent the closest competition in terms of market capitalization within the same industry.
Conclusion
LivaNova PLC has shown a robust stock performance recently, supported by its strategic focus on high-impact medical devices. Despite some challenges in profitability and revenue growth, the company's future growth prospects in EPS are highly promising. The current valuation indicates that the stock is modestly undervalued, presenting a potential opportunity for investors. Comparatively, LivaNova holds a competitive position in the market, which, combined with its growth potential, makes it an interesting stock for potential investment.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
