Integer Holdings Corp (ITGR, Financial), a renowned manufacturer of medical device components, has recently seen a daily gain of 15.59%, despite a 3-month loss of -7.92%. With an Earnings Per Share (EPS) (EPS) of 2.12, the stock's valuation is a subject of interest. Is the stock modestly undervalued or is this just market noise? This article aims to answer this question by providing an in-depth valuation analysis.
A Snapshot of Integer Holdings Corp (ITGR, Financial)
Integer Holdings Corp, with a market cap of $2.70 billion, is a key player in the medical device industry. It specializes in manufacturing medical device components for original equipment manufacturers in the medical industry. Additionally, Integer Holdings develops batteries for non-medical applications in the energy, military, and environmental markets. With a stock price of $80.24 and a GF Value of $93.61, Integer Holdings (ITGR) appears to be modestly undervalued.
The GuruFocus Value (GF Value) Explained
The GF Value is a proprietary measure that estimates a stock's intrinsic value. It's calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line represents the fair value at which the stock should ideally trade. If the stock price is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.
Integer Holdings (ITGR, Financial) appears to be modestly undervalued based on the GF Value calculation. At its current price of $80.24 per share, the stock seems to offer a potential upside. However, being undervalued doesn't guarantee higher returns. It's crucial to consider other factors like financial strength, profitability, and growth prospects.
Assessing Integer Holdings' Financial Strength
Investing in companies with weak financial strength can lead to permanent capital loss. Therefore, it's important to carefully review a company's financial strength before investing. Integer Holdings has a cash-to-debt ratio of 0.04, which ranks worse than 97.35% of 831 companies in the Medical Devices & Instruments industry. GuruFocus ranks Integer Holdings's financial strength as 5 out of 10, suggesting a fair balance sheet.
Profitability and Growth Analysis
Profitable companies, especially those with consistent profitability over the long term, pose less risk. Integer Holdings has been profitable 9 over the past 10 years. With an operating margin of 10.27% and an EPS of $2.12, the company's profitability is fair. However, its growth prospects seem less promising. The company's average annual revenue growth is 2.7%, which ranks worse than 63.77% of 726 companies in the Medical Devices & Instruments industry. The 3-year average EBITDA growth is -4.6%, ranking worse than 69.74% of the companies in the industry.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) and the weighted cost of capital (WACC) can provide insights into its profitability. The ROIC measures how well a company generates cash flow relative to the capital it has invested in its business. The WACC is the rate that a company is expected to pay on average to all its security holders to finance its assets. Ideally, the ROIC should be higher than the WACC. For the past 12 months, Integer Holdings's ROIC is 4.97, and its WACC is 8.84.
Conclusion
In conclusion, the stock of Integer Holdings (ITGR, Financial) appears to be modestly undervalued. The company's financial condition is fair, and its profitability is fair. However, its growth ranks worse than 69.74% of 727 companies in the Medical Devices & Instruments industry. To learn more about Integer Holdings stock, you can check out its 30-Year Financials here.
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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.
