One-glance verdict
Undervalued
$123.92 our estimate vs market $86.36
Wall Street consensus: $101.45 (-18.1% lower than our fair-value estimate)
30% below our estimate, below the bear case
Fundamentals snapshot
Merit Medical Systems, Inc.
MMSI · NMS · Healthcare · Medical Instruments & Supplies
Current price
$86.36
52-week range
$59.74 - $94.75
Market cap
$5.16B
Balance sheet
Watch
7.02x Adequate
Net debt $371.42M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 4.1% last year.
- Reward Returns 9.2% on equity, ahead of 83% of its peers.
- Reward Free cash flow was positive in 9/10 years.
- Risk Net debt grew 78.4% over 3 years.
What this company does
Merit Medical Systems, Inc.
Merit Medical makes the single-use tools, like special needles, tubes, and stents, that doctors use for a wide range of medical procedures. The company makes money by selling these disposable items to hospitals globally, with a large portion of sales coming from devices used in heart and blood vessel treatments. Because these products are essential and can only be used once, hospitals must constantly reorder them, which can create a steady demand for the company's products.
How the company got here
Merit Medical Systems was founded in 1987 by Fred P. Lampropoulos and three colleagues. Their first product was a specialized syringe for injecting dye into arteries during heart procedures. The company grew by developing new products internally and through strategic acquisitions (the purchase of other companies) to expand its offerings. A key part of their strategy has been to not just sell individual products, but to bundle items into customized kits and trays for specific medical procedures. This focus on providing comprehensive solutions for doctors and hospitals has helped them become a major manufacturer of disposable medical devices.
What it actually does
Merit Medical makes single-use devices for a wide range of medical procedures, particularly in areas like cardiology (heart-related treatments), radiology (medical imaging), and oncology (cancer treatment). Think of the many disposable tools a doctor might use during a minimally invasive surgery, such as needles, guide wires, catheters (thin tubes), and inflation devices to open blocked arteries. The company sells these items to hospitals and clinics worldwide, helping doctors diagnose and treat diseases without major surgery. They also create customized kits that package together all the necessary disposable tools for a specific procedure, making the process more efficient for medical staff.
Cardiovascular
This is the company's largest business segment, making up the majority of its revenue. It provides a wide array of devices used in procedures involving the heart and blood vessels. This includes tools for everything from gaining access to a patient's arteries with needles and wires, to products used in cardiac rhythm management (devices that help control irregular heartbeats) and peripheral intervention (treating blocked blood vessels in the limbs). Hospitals and specialized clinics buy these products to perform diagnostic and therapeutic procedures, such as angiography (imaging of blood vessels) and stenting (placing a small tube to hold an artery open).
Endoscopy
This segment focuses on devices used in endoscopy, which involves using a thin, tube-like instrument to look inside the body. Merit produces tools for gastroenterology (related to the digestive system) and pulmonology (related to the lungs). Key products include esophageal stents (tubes that hold open the esophagus) and balloon dilators used to stretch open strictures (narrowed areas) in the airway or digestive tract. These devices are sold to hospitals for use by specialists performing minimally invasive procedures to treat conditions like blockages or tumors.
What management is betting on now
The company's current strategy focuses on profitable growth by expanding in higher-value product areas like interventional oncology and cardiac rhythm management. They are also making strategic "tuck-in" acquisitions (buying smaller companies with complementary products) to add new technologies and expand their portfolio, such as the recent purchase of a company with a tumor tissue localization system. Another key priority is improving profitability by focusing on selling a better mix of products with higher margins (the difference between the cost to make a product and its selling price). Management is also focused on expanding its international sales and launching a steady stream of new and updated products to stay competitive.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$37.97M
FY2024 Q4
$65.27M
FY2025 Q1
$19.51M
FY2025 Q2
$69.56M
FY2025 Q3
$52.54M
FY2025 Q4
$74.05M
FY2026 Q1
$24.67M
FY2026 Q2
$51.95M
Revenue
$418.84M
Net income
$38.80M
Diluted EPS
0.65
Operating cash flow
$69.28M
Free cash flow
$51.95M
Fetching…
Sources
Revenue
$381.88M
Net income
$40.99M
Diluted EPS
0.68
Operating cash flow
$40.68M
Free cash flow
$24.67M
Fetching…
Sources
Revenue
$393.94M
Net income
$38.01M
Diluted EPS
0.64
Operating cash flow
$98.51M
Free cash flow
$74.05M
Fetching…
Sources
Revenue
$384.16M
Net income
$27.75M
Diluted EPS
0.46
Operating cash flow
$74.98M
Free cash flow
$52.54M
Fetching…
Sources
Revenue
$382.46M
Net income
$32.58M
Diluted EPS
0.54
Operating cash flow
$83.31M
Free cash flow
$69.56M
Fetching…
Sources
Revenue
$355.35M
Net income
$30.15M
Diluted EPS
0.49
Operating cash flow
$40.57M
Free cash flow
$19.51M
Fetching…
Sources
Revenue
$355.16M
Net income
$27.95M
Diluted EPS
0.46
Operating cash flow
$68.74M
Free cash flow
$65.27M
Fetching…
Sources
Revenue
$339.85M
Net income
$28.44M
Diluted EPS
0.48
Operating cash flow
$47.33M
Free cash flow
$37.97M
Fetching…
Sources
Is it cheap or expensive?
Fair value $123.92 vs current price $86.36
Wall Street consensus is the average analyst price target: $101.45 (-18.1% lower than our fair-value estimate).
Our most-likely fair value is $123.92 a share — about 43.5% above today's price of $86.36, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $371.4M. Interest coverage 7.0x.
Net debt
$371.42M
Interest coverage
7.02x
Merit Medical Systems, Inc.'s profit covers its interest bill about 7.0 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
MMSI
BASELINE
Merit Medical Systems, Inc.
Total debt $820.12M Interest coverage 7.02x This is the baseline the peer rows are being compared against.
Total debt $2.94B Interest coverage 2.55x -64% vs MMSI Carries about 2.7x less debt cushion than MMSI.
Total debt $1.29B Interest coverage 1.17x -83% vs MMSI Carries about 6.0x less debt cushion than MMSI.
Total debt $1.36B Interest coverage 6.58x -6% vs MMSI Has roughly the same debt cushion as MMSI.
Total debt $834.25M Interest coverage 3.30x -53% vs MMSI Carries about 2.1x less debt cushion than MMSI.
Total debt $10.96M Interest coverage -8.26x -100% vs MMSI This peer has almost no interest-payment cushion compared with MMSI.
What you should know
The case for and against MMSI
3 Rewards
1 Risk
Rewards
-
Revenue grew 4.1% last year.
-
Returns 9.2% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
Net debt grew 78.4% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
35.54x
Forward P/E
18.73x
P/B
3.07x
P/S
3.27x
EV/EBITDA
16.31x
PEG ratio
1.56x
Profitability
How much profit each dollar creates
Gross margin
49.5%
Operating margin
14.5%
Net margin
9.2%
ROE
9.2%
ROA
4.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.49x
Current ratio
4.20x
Quick ratio
2.64x
Total debt
$820.12M
Total cash
$448.70M
Growth
How the business has been compounding
Revenue TTM
$1.58B
Revenue 5Y CAGR
9.0%
EPS TTM
2.43
EPS 5Y CAGR
18.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$283.45M
Free CF TTM
$215.66M
FCF margin
13.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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