Core Insights - CONMED Corporation (CNMD) is positioned for growth due to the rising adoption of its high-margin platforms like AirSeal, Buffalo Filter, and BioBrace, alongside increasing robotic procedure volumes and the expansion of Ambulatory Surgery Centers (ASCs) [1][4][5] - The company faces challenges from tariff impacts on gross margins and the launch of Intuitive Surgical's da Vinci 5, which delays AirSeal demand [2][11][13] - CONMED has a market capitalization of $1.38 billion and projects a 6.3% earnings growth for 2026, with a history of surpassing earnings estimates [3] Growth Drivers - The adoption of high-margin platforms is strong, with BioBrace expanding to over 70 procedures, AirSeal gaining traction for its clinical benefits, and Buffalo Filter benefiting from smoke-evacuation mandates [4][7] - The expansion of robotic surgery and ASC penetration is expected to provide structural long-term growth opportunities [5][8] - Supply chain improvements are unlocking lost revenue and margin, with significant progress reported in orthopedic supply chain recovery [9] Strategic Focus - A comprehensive portfolio review is ongoing, focusing on high-return segments such as minimally invasive surgery, robotic platforms, and orthopedic soft-tissue repair [10] - Management aims to concentrate resources on these areas to improve margins and enhance shareholder value [10] Challenges - Tariffs are compressing gross margins, with an expected impact of 150 basis points in the fourth quarter [11] - The supply chain recovery is taking longer than anticipated, which may delay revenue recovery and affect market share [12] - The integration of the dV5 system limits the immediate opportunity for AirSeal adoption [13] Financial Outlook - There is a rising estimate revision trend for 2025, with the Zacks Consensus Estimate for earnings moving up to $4.49 per share [14]

Core Viewpoint - The article highlights CONMED (CNMD) as a strong value stock opportunity, supported by various financial metrics indicating it is undervalued compared to its industry peers [4][8]. Financial Metrics - CNMD has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4][3]. - The stock's P/E ratio is 10.69, significantly lower than the industry average of 18.29, suggesting it is undervalued [4]. - CNMD's PEG ratio stands at 1.62, compared to the industry average of 1.85, indicating favorable earnings growth expectations [5]. - The P/S ratio for CNMD is 1.02, lower than the industry average of 1.38, reinforcing its undervalued status [6]. - The P/CF ratio is 8.23, well below the industry average of 18.79, highlighting strong cash flow relative to its peers [7].

Core Viewpoint - Investors in the Medical - Dental Supplies sector should consider Conmed (CNMD) and Merit Medical (MMSI) as potential value opportunities, with CNMD appearing to be the superior option based on valuation metrics [1]. Valuation Metrics - Both CNMD and MMSI currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions for both companies [3]. - CNMD has a forward P/E ratio of 9.52, while MMSI has a forward P/E of 23.65, suggesting that CNMD is more attractively priced [5]. - The PEG ratio for CNMD is 1.41, compared to MMSI's PEG ratio of 2.46, indicating that CNMD offers better value relative to its expected earnings growth [5]. - CNMD's P/B ratio is 1.31, while MMSI's P/B ratio is 3.38, further supporting the conclusion that CNMD is undervalued compared to MMSI [6]. - Based on these valuation metrics, CNMD holds a Value grade of A, whereas MMSI has a Value grade of C, reinforcing the view that CNMD is the superior value option [6].

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors identify stocks with the potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each targeting different investment strategies [3][4][5][6] - Value Score focuses on identifying undervalued stocks using financial ratios [3] - Growth Score emphasizes a company's financial health and future growth potential [4] - Momentum Score identifies trends in stock prices and earnings estimates to optimize entry points [5] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [6] Zacks Rank and Its Importance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investment decisions [7] - Stocks rated 1 (Strong Buy) have historically outperformed the S&P 500, with an average annual return of +23.93% since 1988 [7] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9] Company Spotlight: Conmed Corporation - Conmed Corporation is a global medical technology company specializing in surgical devices for orthopedics and general surgery [11] - The company operates in two segments: Orthopedics and General Surgery, offering innovative products like BioBrace and advanced energy devices [11] - Conmed holds a Zacks Rank of 2 (Buy) and a VGM Score of A, indicating strong growth potential [12] - The company is projected to achieve year-over-year earnings growth of 7.7% for the current fiscal year, with recent earnings estimates revised upward [12][13]

Core Insights - Investors in the Medical - Dental Supplies sector may consider Conmed (CNMD) and Merit Medical (MMSI) as potential value stocks [1] - A strong Zacks Rank combined with a good Value grade is identified as an effective strategy for finding value stocks [2] - Both CNMD and MMSI currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions [3] Valuation Metrics - CNMD has a forward P/E ratio of 9.88, while MMSI has a forward P/E of 23.47, suggesting CNMD may be undervalued [5] - The PEG ratio for CNMD is 1.50, compared to MMSI's PEG ratio of 2.39, indicating CNMD's better valuation relative to its expected earnings growth [5] - CNMD's P/B ratio is 1.36, while MMSI's P/B ratio is 3.35, further supporting CNMD's position as a more attractive value option [6] Conclusion - Based on the valuation metrics, CNMD is considered the superior value option compared to MMSI [7]

Core Insights - CONMED Corporation (CNMD) reported adjusted earnings per share (EPS) of $1.08 for Q3 2025, reflecting a 2.9% year-over-year increase and surpassing the Zacks Consensus Estimate by 2.9% [1] - The company’s revenues reached $337.9 million in Q3 2025, marking a 6.7% year-over-year growth and exceeding the Zacks Consensus Estimate by 0.4% [2][7] - Gross profit decreased by 7.2% year-over-year to $166.1 million, with gross margin contracting by 736 basis points to 49.2% [6][7] Revenue Breakdown - Revenues from Orthopedic Surgery totaled $138.2 million, up 5.9% year-over-year, driven by strong clinical adoption of BioBrace [3] - General Surgery revenues were $199.7 million, reflecting a 7.3% year-over-year increase [4] - Domestic revenues amounted to $194 million, up 5.9% year-over-year, while international revenues reached $143.9 million, up 7.8% [5] Margin Analysis - Operating margin fell significantly by 1723 basis points to 3.5%, with total operating profit dropping 81.9% year-over-year to $11.9 million [8][7] - Selling and administrative expenses surged by 40.7% year-over-year to $140.3 million, while research and development expenses increased by 2.5% to $13.9 million [8] Financial Position - At the end of Q3 2025, CONMED had a cash balance of $38.9 million, up from $33.9 million at the end of Q2 2025, and long-term debt decreased to $853 million from $881.1 million [9] Guidance - For 2025, CONMED narrowed its revenue outlook to a range of $1.365 billion to $1.372 billion, with adjusted EPS projected between $4.48 and $4.53 [10] Market Outlook - Management expressed optimism regarding the performance of its Orthopedics and General Surgery portfolios, particularly products like BioBrace and Buffalo Filter [12] - Despite the positive revenue growth, the contraction in margins raises concerns about future performance [12]

Financial Performance - Net sales increased by 6.7% to $337.9 million for the three months ended September 30, 2025, and by 4.2% to $1,001.5 million for the nine months ended September 30, 2025, compared to the same periods in 2024[89]. - Orthopedic surgery sales grew by 5.9% and 3.0% for the three and nine months ended September 30, 2025, respectively, driven by specific product offerings[90]. - General surgery sales increased by 7.3% and 5.1% for the three and nine months ended September 30, 2025, respectively, primarily due to growth in key product lines[90]. - Gross profit margins decreased by 250 basis points to 53.1% for the nine months ended September 30, 2025, compared to 55.6% in the same period of 2024[90]. Costs and Expenses - Cost of sales rose to $171.8 million for the three months ended September 30, 2025, compared to $137.7 million in the same period of 2024, leading to a gross profit margin decrease of 730 basis points to 49.2%[90]. - Selling and administrative expenses increased to $140.3 million for the three months ended September 30, 2025, compared to $99.7 million in the same period of 2024, with a percentage of net sales rising by 1,000 basis points to 41.5%[93]. - The company incurred $3.7 million and $12.3 million in consulting costs for supply chain and manufacturing improvements during the three and nine months ended September 30, 2025, respectively[91]. - A write-off of $19.7 million in inventory, equipment, tooling, and patents occurred due to the cancellation of planned new product lines during the three and nine months ended September 30, 2025[92]. - The company experienced higher manufacturing and operating costs due to inflationary pressures and ongoing supply chain challenges[109]. International Sales - International sales accounted for approximately 43% of consolidated net sales for both the nine months ended September 30, 2025, and 2024[83]. Future Agreements and Sales - The company will not renew its Distribution Agreement for the Gore® VIABIL® device after December 31, 2026, which represented $44.1 million in net sales for the nine months ended September 30, 2025[86]. Research and Development - Research and development expense increased to $13.9 million in Q3 2025, compared to $13.6 million in Q3 2024, while it decreased to $41.0 million in the nine months ended September 30, 2025, from $41.3 million in the same period in 2024[95]. Interest and Tax Expenses - Interest expense decreased to $7.6 million in Q3 2025 from $9.3 million in Q3 2024, and to $23.7 million in the nine months ended September 30, 2025, from $28.4 million in the same period in 2024[96]. - Income tax expense recorded an effective tax rate of 33.1% for Q3 2025, compared to 13.2% for Q3 2024, and 27.6% for the nine months ended September 30, 2025, compared to 17.4% for the same period in 2024[100]. Cash Flow and Financing - Net cash provided by operating activities was $124.4 million in the nine months ended September 30, 2025, compared to $123.6 million in the same period in 2024[105]. - Capital expenditures increased to $14.7 million in the nine months ended September 30, 2025, from $9.0 million in the same period a year ago[107]. - Net cash used in financing activities was $98.5 million in the nine months ended September 30, 2025, compared to $99.9 million in the same period in 2024[108]. - As of September 30, 2025, there were $60.0 million in borrowings outstanding on the term loan facility, with no borrowings under the revolving credit facility[110]. - The Board of Directors authorized a $150.0 million share repurchase program effective October 31, 2025, with expectations to repurchase at least $25.0 million in shares annually starting in 2026[115]. Debt Covenants - The eighth amended and restated senior credit agreement contains covenants requiring the maintenance of certain financial ratios and restricting dividend payments[111].

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Core Insights - Conmed reported revenue of $337.93 million for the quarter ended September 2025, reflecting a year-over-year increase of 6.7% and exceeding the Zacks Consensus Estimate of $336.52 million by 0.42% [1] - The company's EPS for the quarter was $1.08, up from $1.05 in the same quarter last year, resulting in an EPS surprise of 2.86% compared to the consensus estimate of $1.05 [1] Revenue Breakdown - International revenue reached $143.9 million, a 7.8% increase year-over-year, but below the average estimate of $148.63 million [4] - Domestic revenue was reported at $194 million, surpassing the average estimate of $187.89 million, with a year-over-year growth of 5.9% [4] - Net sales for single-use products totaled $289.2 million, slightly above the average estimate of $288.97 million, marking a 6.8% increase year-over-year [4] - General surgery net sales were $199.7 million, close to the average estimate of $200.27 million, reflecting a 7.3% year-over-year change [4] - Orthopedic surgery net sales amounted to $138.2 million, exceeding the average estimate of $136.24 million, with a year-over-year increase of 5.9% [4] - Capital products net sales were reported at $48.7 million, above the average estimate of $47.55 million, showing a 6.1% increase compared to the previous year [4] Stock Performance - Conmed's shares have returned -0.4% over the past month, while the Zacks S&P 500 composite has increased by 1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Conmed (CNMD) reported quarterly earnings of $1.08 per share, exceeding the Zacks Consensus Estimate of $1.05 per share, and showing a slight increase from $1.05 per share a year ago, indicating a positive earnings surprise of +2.86% [1] Financial Performance - The company achieved revenues of $337.93 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.42% and reflecting a year-over-year increase from $316.7 million [2] - Over the last four quarters, Conmed has consistently exceeded consensus EPS and revenue estimates [2] Stock Performance - Conmed shares have declined approximately 33.2% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [3] - The current Zacks Rank for Conmed is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.31 on revenues of $368.68 million, and for the current fiscal year, it is $4.47 on revenues of $1.37 billion [7] - The trend of earnings estimate revisions for Conmed was mixed prior to the earnings release, which may influence future stock performance [6] Industry Context - The Medical - Dental Supplies industry, to which Conmed belongs, is currently ranked in the top 24% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]