Establishment Labs Holdings Inc (ESTA, Financial) has experienced a remarkable surge in its stock price, with a 9.89% gain over the past week and an impressive 58.25% gain over the past three months. The company's market capitalization now stands at $1.27 billion, with a current stock price of $46.88. Despite this upward trajectory, the GF Value suggests caution, labeling the stock as a Possible Value Trap and advising investors to think twice before making a move. The GF Value, currently at $86.46, has seen a slight increase from the past GF Value of $84.43, yet the valuation warning remains unchanged.
Introduction to Establishment Labs Holdings Inc
Establishment Labs Holdings Inc, operating within the Medical Devices & Instruments industry, is a medical technology company that specializes in the design, manufacture, and marketing of silicone-filled breast and body shaping implants. These products are marketed under the Motiva implants Brand and distributed globally to medical distributors, physicians, hospitals, and clinics. The company's geographical segments include Europe, Latin America, Asia-Pacific/Middle East, and Others, reflecting its international presence in the aesthetic medical device market.
Assessing Profitability
ESTA's Profitability Rank is currently at 3 out of 10, indicating challenges in maintaining profitability. The company's Operating Margin stands at -31.61%, which, while not ideal, is better than 33.54% of 823 companies in the same industry. The ROE is deeply negative at -570.37%, yet it surpasses 1.23% of its industry peers. Similarly, the ROA is at -30.73%, outperforming 26.52% of competitors, and the ROIC is -42.06%, which is better than 28.69% of the industry. These figures suggest that while ESTA is struggling with profitability, it is not the worst performer in its sector.
Company Growth Trajectory
ESTA's Growth Rank is 4 out of 10, reflecting moderate growth potential. The company has achieved a 14.90% 3-Year Revenue Growth Rate per Share, which is better than 67.77% of 723 companies in the industry. The 5-Year Revenue Growth Rate per Share is even more impressive at 23.30%, surpassing 84.05% of its peers. However, the 3-Year EPS without NRI Growth Rate is at -9.00%, and the 5-Year EPS without NRI Growth Rate is at -4.50%, indicating that earnings growth has not kept pace with revenue expansion.
Key Shareholders in ESTA
ESTA's shareholder base includes notable investors such as Ron Baron (Trades, Portfolio), who holds 334,775 shares, representing a 1.23% share percentage. Jim Simons (Trades, Portfolio) follows with 58,934 shares, accounting for 0.22% of the company's shares. Chuck Royce (Trades, Portfolio) holds a smaller stake of 16,190 shares, which translates to a 0.06% share percentage. These investors' involvement provides a vote of confidence in the company's potential, despite the current profitability and growth challenges.
Competitive Landscape
When compared to its competitors, ESTA holds a unique market position. Avanos Medical Inc (AVNS, Financial) has a market cap of $860.761 million, Quanterix Corp (QTRX, Financial) is valued at $898.456 million, and RxSight Inc (RXST, Financial) stands at $2 billion. ESTA's market cap of $1.27 billion places it in a competitive stance within this group, suggesting that it holds a significant share of the market relative to its closest competitors.
Conclusion
In summary, ESTA's recent stock performance has been impressive, with significant gains over the past three months. However, the GF Valuation warns of a possible value trap, urging investors to exercise caution. The company's profitability metrics, while not stellar, indicate that it is not the weakest in its industry. Growth rates in revenue are strong, but earnings growth has lagged. The presence of prominent shareholders like Ron Baron (Trades, Portfolio), Jim Simons (Trades, Portfolio), and Chuck Royce (Trades, Portfolio) may provide some reassurance to potential investors. Finally, ESTA's market position is robust when compared to its closest competitors, suggesting that it has a solid foothold in the medical devices sector. Investors should weigh these factors carefully when considering ESTA as a potential addition to their portfolios.
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.
