Valens Equity Weekly Insights - 2023 07 25
Integra Lifesciences (IART) announced recalls for two of its products since August 2022. The market appears to think this is a sign of more issues to come and doesn't understand it's the company drawing a line under quality control issues, as it brings in new leadership. Uniform Accounting shows that the market is overly pessimistic about this company, indicating equity upside.Integra is one of the leaders in the medical technology industry, specifically in the fields of regenerative medicine and surgical instruments. Its breakthrough DRT technology and acquisition of Codman Neurosurgery has propelled the company to a 20% market share for both of its segments. The company has recently brought in a new management team that is focused on addressing quality control issues as well as promoting growth while improving efficiency. This points to continued Uniform ROA stability, yet the market is pricing in zero growth and returns to fade to their lowest levels since 2020.
Integra's management is closely aligned to focus on revenue growth, asset efficiency, and
margins, which should drive profitability and growth higher than the market expects.
Management confidence in the Q1 earnings call about its growth in its specialty surgery business and quality control improvements suggest management is positioned to execute above market expectations.
IART
Integra LifeSciences Holdings is a medical devices company engaged in the development, manufacturing, and marketing of surgical implants and medical instruments. The company manufactures and sells its products in the following two reportable business segments: Codman Specialty Surgical, which includes technologies in dural repair, ultrasonic tissue ablation, intracranial cranial pressure monitoring, hydrocephalus management, and cranial stabilization systems; and Orthopedics and Tissue Technologies, which focus on addressing soft tissue, nerve, and tendon repairs as well as reconstruction in the hand, wrist, elbow, shoulder, ankle and foot.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.