Integra Lifesciences (IART) AI Stock Analysis

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Integra Lifesciences

(NASDAQ:IART)

52Neutral

Integra Lifesciences' stock score reflects a combination of mixed financial performance and weak technical indicators. While revenue growth and strategic initiatives show promise, significant challenges in profitability, valuation, and operational efficiency remain. The stock's current underperformance in technical analysis and valuation metrics suggests cautious investment sentiment.

Positive Factors

Growth Opportunities

The Acclarent deal continues to outperform expectations and has been identified as a growth driver for the company.

Leadership Impact

The new CEO, Mojdeh Poul, brings over 30 years of MedTech experience, which is seen as timely as the company works to resolve its challenges.

Management Strategy

Management has implemented a Compliance Master Plan and partnered with third-party consulting firms to address quality issues, showing proactive steps towards improvement.

Negative Factors

Operational Challenges

The company is approaching FY25 cautiously with additional shipping holds due to quality remediation efforts, indicating ongoing operational challenges.

Profitability Concerns

Gross margins for FY25 are expected to decline, suggesting potential pressure on profitability.

Revenue Guidance

FY25 revenue guidance is expected to be below prior Street expectations, which could indicate limited growth potential.

Integra Lifesciences (IART) vs. S&P 500 (SPY)

Market Cap

$1.51B

Dividend YieldN/A

Average Volume (3M)770.88K

Price to Earnings (P/E)―

Beta (1Y)1.63

Revenue Growth4.47%

EPS Growth-110.70%

CountryUS

Employees4,396

SectorHealthcare

Sector Strength74

IndustryMedical - Devices

Share Statistics

EPS (TTM)-0.09

Shares Outstanding77,204,640

10 Day Avg. Volume574,314

30 Day Avg. Volume770,876

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.08

Price to Cash Flow (P/CF)8.60

P/FCF Ratio38.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$26.00

Price Target Upside35.49% Upside

Rating ConsensusHold

Number of Analyst Covering6

Integra Lifesciences Business Overview & Revenue Model

Company DescriptionIntegra LifeSciences (IART) is a global medical technology company focused on developing, manufacturing, and marketing innovative solutions for the surgical, neuro, and orthopedic markets. The company's core products include neurosurgical and critical care solutions, regenerative technologies, and surgical instrumentation. Integra's offerings are designed to improve patient outcomes and enhance healthcare providers' capabilities across various medical disciplines.

How the Company Makes MoneyIntegra LifeSciences generates revenue primarily through the sale of its medical devices and technologies to hospitals, healthcare providers, and distributors worldwide. The company's revenue streams are categorized into two main segments: Codman Specialty Surgical and Tissue Technologies. Codman Specialty Surgical includes products related to neurosurgery and instrumentation, while Tissue Technologies focuses on regenerative technologies and skin repair solutions. Integra also engages in strategic partnerships and acquisitions to expand its product portfolio and market reach, enhancing its ability to generate income. Additionally, the company invests in research and development to innovate and improve its product offerings, further driving sales and revenue growth.

Integra Lifesciences Financial Statement Overview

Summary

Integra Lifesciences demonstrates mixed financial health. Positive revenue growth and reduced leverage are offset by declining profit margins and net income, which indicate profitability challenges. Despite a strong operating cash flow, the decrease in free cash flow suggests potential liquidity issues.

Income Statement

Neutral

Integra Lifesciences has experienced a revenue growth rate of 4.48% from 2023 to 2024, which is positive. However, the gross profit margin is relatively low at 0% due to the gross profit equaling total revenue, indicating potential misreporting or zero cost of goods sold. The net profit margin has turned negative in 2024, from 4.39% in 2023 to -0.43%, suggesting profitability issues. EBIT and EBITDA margins have also decreased significantly, indicating declining operational efficiency.

Balance Sheet

Neutral

The debt-to-equity ratio improved from 1.06 in 2023 to 0.14 in 2024, reflecting reduced leverage and lower risk. The return on equity has dropped dramatically from 4.27% in 2023 to -0.45% in 2024, indicating a substantial decline in profitability for shareholders. The equity ratio remains stable, showing consistent financial structure in terms of asset financing.

Cash Flow

Positive

Free cash flow has decreased, but the operating cash flow to net income ratio is strong, even with a drop in net income. The company maintains positive operating cash flow, which is a good indicator of liquidity, but the free cash flow growth rate is negative, showing a decline from previous years.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.61B	1.54B	1.56B	1.54B	1.37B
	Gross Profit
882.06M	888.39M	970.31M	944.64M	851.03M
	EBIT
28.41M	111.53M	238.92M	197.23M	151.37M
	EBITDA
193.29M	274.01M	391.10M	366.33M	267.93M
	Net Income Common Stockholders
-6.94M	67.74M	180.55M	169.07M	133.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
273.57M	309.10M	456.66M	513.45M	470.17M
	Total Assets
4.04B	3.78B	3.89B	3.78B	3.62B
	Total Debt
215.38M	1.68B	1.62B	1.65B	1.66B
	Net Debt
-31.00M	1.41B	1.16B	1.14B	1.19B
	Total Liabilities
2.49B	2.19B	2.09B	2.10B	2.10B
	Stockholders Equity
1.55B	1.59B	1.80B	1.68B	1.51B
Cash Flow		Free Cash Flow
24.96M	73.09M	217.38M	264.35M	139.94M
	Operating Cash Flow
129.38M	139.96M	264.47M	312.43M	203.83M
	Investing Cash Flow
-390.81M	-94.18M	-58.58M	-161.44M	-68.07M
	Financing Cash Flow
237.86M	-229.93M	-251.95M	-98.23M	121.63M

Integra Lifesciences Technical Analysis

Technical Analysis Sentiment

Negative

Last Price19.19

Price Trends

50DMA

23.11

Negative

100DMA

23.27

Negative

200DMA

22.93

Negative

Market Momentum

MACD

-0.41

Positive

RSI

41.64

Neutral

STOCH

19.86

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IART, the sentiment is Negative. The current price of 19.19 is below the 20-day moving average (MA) of 21.68, below the 50-day MA of 23.11, and below the 200-day MA of 22.93, indicating a bearish trend. The MACD of -0.41 indicates Positive momentum. The RSI at 41.64 is Neutral, neither overbought nor oversold. The STOCH value of 19.86 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IART.

Integra Lifesciences Risk Analysis

Integra Lifesciences disclosed 34 risk factors in its most recent earnings report. Integra Lifesciences reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Integra Lifesciences Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNMD	71 Outperform	$1.76B	13.36	14.74%	1.54%	4.98%	104.60%
AHCO	71 Outperform	$1.29B	14.88	5.45%	―	1.90%	―
UFPT	67 Neutral	$1.51B	25.44	18.76%	―	26.08%	30.54%
LIVN	56 Neutral	$1.94B	31.11	4.87%	―	8.33%	256.54%
IART	52 Neutral	$1.51B	―	-0.44%	―	4.47%	-110.70%
Sector *	48 Neutral	$6.36B	1.24	-44.94%	2.70%	18.33%	1.47%
AORT	46 Neutral	$985.70M	―	-4.78%	―	9.75%	57.91%

* Healthcare Sector Average

Performance Comparison

IART

Integra Lifesciences

19.19

-14.89

-43.69%

CNMD

Conmed

56.78

-21.98

-27.91%

AORT

Artivion

23.95

2.48

11.55%

UFPT

Ufp Technologies

211.92

-25.01

-10.56%

LIVN

LivaNova

35.72

-19.52

-35.34%

AHCO

AdaptHealth

9.80

-0.09

-0.91%

Integra Lifesciences Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: -12.97% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong revenue growth and EPS performance. However, significant operational challenges and quality-related issues impacted organic growth and margins. The company is focused on executing its compliance master plan and improving manufacturing capacity. Guidance for the first quarter of 2025 indicates potential continued challenges, but strategic initiatives show promise for future growth.

Highlights

Revenue Growth

Total revenue for the fourth quarter was $443 million, representing year-over-year reported growth of 11.5% within the guidance range. This increase was driven by supply chain recovery, clearance of ship holds, and the ramp-up of Integra Skin production.

Adjusted EPS Performance

Fourth quarter adjusted EPS was $0.97, which was above the guidance range, supported by a sequential increase in revenue and successful integration of Acclarent.

CSS Revenue Highlights

Reported fourth quarter revenues in CSS were $314.7 million, an increase of 15.8% on a reported basis and 4.1% on an organic basis, driven by the Acclarent acquisition and strong performance in the neurosurgery segment.

Tissue Technologies Growth

Tissue Technologies grew 2% on both a reported and organic basis compared to the prior year, with Wound Reconstruction franchise sales increasing by 8.2%.

Strategic Initiatives

The company is advancing its dual PMA clinical strategy for SurgiMend and DuraSorb to capitalize on the implant-based breast reconstruction market and expanded its international commercial footprint in Brazil, India, Korea, and China.

Lowlights

Operational Challenges

The company faced operational challenges, particularly in quality, manufacturing, and supply chain, necessitating a compliance master plan to address systemic issues.

First Quarter 2025 Guidance

First quarter 2025 revenues are expected to be between $375 million and $385 million, with organic growth expected to be negative, ranging from -6.2% to -3.5%.

Organic Revenue Decline

2024 organic revenue growth declined by 1.3%, impacted by approximately $90 million in supply challenges and quality-related product holds.

Adjusted EBITDA Margin Decline

Full-year adjusted EBITDA margin was 20%, down 400 basis points compared to 2023, reflecting the impact of supply challenges and investments in the compliance master plan.

Leverage and Cash Flow Constraints

Net debt was $1.5 billion with a consolidated total leverage ratio of four times, and free cash flow conversion was 12.7%, reflecting investments in manufacturing infrastructure.

Company Guidance

In the Integra LifeSciences Fourth Quarter 2024 Earnings Conference Call, the company announced a total revenue of $443 million for the quarter, representing an 11.5% year-over-year increase, landing within their guidance range. The adjusted EPS for the quarter was $0.97, surpassing the guidance range. The full-year 2024 revenues were reported at $1.61 billion, indicating a 4.5% growth on a reported basis but a 1.3% decline organically due to supply challenges. For 2025, first-quarter revenues are forecasted between $375 million and $385 million, with expected organic growth ranging from negative 6.2% to negative 3.5%. Full-year 2025 revenues are projected to be between $1.65 billion and $1.72 billion, with an anticipated adjusted EPS of $2.41 to $2.51. The guidance includes potential impacts from quality-related shipping holds, reflecting a cautious outlook amidst ongoing operational improvements.

Integra Lifesciences Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Integra Lifesciences Implements New Severance Program for Executives

Neutral

Dec 17, 2024

Integra LifeSciences has adopted a change in control severance program effective January 1, 2025, providing severance and benefits to certain executives in the event of employment termination following a company change in control by December 31, 2025. The program aims to ensure stability and incentivize retention during potential transitions, impacting executive compensation and company operations if a change occurs.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.