Merit Medical Systems (MMSI): Valuation in Focus After Positive WAVE Trial Data on WRAPSODY Endoprosthesis

Merit Medical Systems (MMSI) saw attention after unveiling positive 24-month results from the WAVE trial for its WRAPSODY Cell-Impermeable Endoprosthesis. The data, announced during a leading vascular conference, showed the device’s superior performance compared to standard treatment.

See our latest analysis for Merit Medical Systems.

After a tough year for total shareholders, news like the positive WAVE trial results is sparking fresh interest. Merit’s share price has climbed 4.6% over the past month, but the past year’s total shareholder return of -14.8% shows sentiment is still recovering. However, the company’s multi-year track record remains strong, with a 25.7% total return over three years and more than 70% over five years. This suggests that the long-run outlook could be improving if momentum continues to build.

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With a strong run after the WAVE trial news and a share price still below analyst targets, investors are now considering whether Merit's recent momentum signals an attractive entry point or if the market is already anticipating future growth.

Most Popular Narrative: 15% Undervalued

Compared to Merit Medical Systems' last close at $87.55, the most widely followed narrative assigns a fair value of $103.55. This gap has sparked new debate around whether the current price fully reflects the company's long-term growth strategy and industry trends.

Ongoing investments in operational efficiency, manufacturing automation, and product portfolio expansion through innovation and strategic M&A are driving improved gross and operating margins (evidenced by record 21% non-GAAP operating margin). These initiatives are supporting higher cash flow and net earnings.

Read the complete narrative.

Want to know what makes analysts so optimistic? Their model leans on a bold profit margin expansion, along with the expectation of earnings growth that could reshape how this company is valued. See what financial leap could put Merit well ahead of its peers.

Result: Fair Value of $103.55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, delays in securing reimbursement for WRAPSODY CIE and ongoing global trade uncertainties could significantly slow Merit's anticipated growth and put pressure on future margins.

Find out about the key risks to this Merit Medical Systems narrative.

Another View: Market Ratios Tell a Different Story

Looking at valuation through common market ratios paints a less optimistic picture. Merit's price-to-earnings ratio stands at 43.8x, notably higher than both its peer group’s 24.9x average and the sector’s 28.1x, as well as the fair ratio estimate of 23.5x. This sharp premium could mean higher risk if growth does not deliver as expected. Are investors overlooking warning signs, or betting on a breakthrough?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Merit Medical Systems Narrative

If these perspectives do not quite align with your own, take a look at the underlying numbers and craft your personal view in just minutes. Do it your way

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Merit Medical Systems.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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