CNMD - AirSeal Concerns Have Let Too Much Air Out Of Conmed's Valuation
2024-06-21 14:49:49 ET
Summary
- Conmed shares have dropped 30% due to worries about competition from a rival insufflator integrated into Intuitive Surgical's newest daVinci platform.
- The impact of this competition on Conmed's growth and profitability seems overstated, as robot-attached insufflator revenue would have to decline meaningfully from here to make the math work.
- Conmed still has multiple growth drivers (including AirSeal), like Buffalo Filter (smoke evacuation), BioBrace bio-inductive implants, and extremity implants, and about 40% of the business is growing at a double-digit rate.
- Long-term revenue growth of over 6% and EBITDA margins in the low-20%'s can support a fair value close to $100.
Writing about CONMED Corporation ( CNMD ) ("Conmed") back in the fall of 2023, I mentioned some concerns about being bullish on this smaller med-tech company in the face of a weak environment for med-tech stocks and worries that Conmed could see significant competition from a competitor's insufflator being integrated into the newest Intuitive Surgical, Inc. ( ISRG ) platform....
AirSeal Concerns Have Let Too Much Air Out Of Conmed's Valuation