Shares of Cantel Medical Corp rose 4% after the infection prevention and control products and services provider posted better-than-expected fiscal 2Q results. Robust recurring revenue mix and prudent cost management were the primary drivers.
Cantel Medical (CMD) reported 2Q adjusted earnings of $0.79 per share, up 29.5% year-over-year, and beat analysts’ expectations of $0.50. Adjusted net sales of $294 million surpassed the Street’s estimates of $276.63 million and inched up 1.1% from the year-ago period.
The company’s dental revenue grew 4.3% in the quarter, while medical revenue increased marginally. The performance of recurring revenue categories, which includes new products, drove a positive mix in medical and dental, the company said. Additionally, total operating expenses came in at $111.8 million, down 2.4% year-over-year. (See Cantel Medical stock analysis on TipRanks)
Cantel Medical CEO George Fotiades said, “We remain very optimistic with elevated uptake for our infection prevention consumable products as enhanced infection prevention protocols become standard practice.”
Following the fiscal 2Q results, Needham analyst Michael Matson maintained a Hold rating.
The analyst believes “Cantel Medical can return to mid-single digit revenue growth (with mid-single digit Medical growth, flat Life Sciences growth, and mid- to upper- single digit Dental growth) while driving modest margin improvement and high single digit (or better) earnings growth.”
Overall, the stock has a Hold consensus rating based on 4 unanimous Holds. The average analyst price target of $85 implies almost 12% upside potential from current levels. Shares have increased 48.5% over the past year.
According to TipRanks’ Smart Score system, Cantel Medical gets a 4 out of 10, which indicates that the stock is likely to perform in line with market averages.
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