Haemonetics (NYSE:HAE) Misses Q4 Revenue Estimates

Blood products company Haemonetics (NYSE:HAE). fell short of the market’s revenue expectations in Q4 CY2024 as sales rose 3.7% year on year to $348.5 million. Its non-GAAP profit of $1.19 per share was 1.7% above analysts’ consensus estimates.

Is now the time to buy Haemonetics? Find out by accessing our full research report, it’s free.

Company Overview

Founded in 1971, Haemonetics Corporation (NYSE:HAE) offers products for plasma collection, blood donation, and surgical and critical care.

Medical Devices & Supplies - Specialty

The medical devices industry operates a business model that balances steady demand with significant investments in innovation and regulatory compliance. The industry benefits from recurring revenue streams tied to consumables, maintenance services, and incremental upgrades to the latest technologies, although specialty devices are more niche. The capital-intensive nature of product development, coupled with lengthy regulatory pathways and the need for clinical validation, can weigh on profitability and timelines. In addition, there are constant pricing pressures from healthcare systems and insurers maximizing cost efficiency. Over the next several years, one tailwind is demographic–aging populations means rising chronic disease rates that drive greater demand for medical interventions and monitoring solutions. Advances in digital health, such as remote patient monitoring and smart devices, are also expected to unlock new demand by shortening upgrade cycles. On the other hand, the industry faces headwinds from pricing and reimbursement pressures as healthcare providers increasingly adopt value-based care models. Additionally, the integration of cybersecurity for connected devices adds further risk and complexity for device manufacturers.

Sales Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Haemonetics’s 6.6% annualized revenue growth over the last five years was mediocre. This was below our standard for the healthcare sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Haemonetics’s annualized revenue growth of 10.3% over the last two years is above its five-year trend, suggesting some bright spots.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Haemonetics’s organic revenue averaged 8.9% year-on-year growth. Because this number aligns with its normal revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Haemonetics’s revenue grew by 3.7% year on year to $348.5 million, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 3.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Adjusted Operating Margin

Haemonetics has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average adjusted operating margin of 19.7%.

Analyzing the trend in its profitability, Haemonetics’s adjusted operating margin rose by 2.9 percentage points over the last five years. The company’s two-year trajectory shows its performance was mostly driven by its recent improvements.

This quarter, Haemonetics generated an adjusted operating profit margin of 27.6%, up 5.8 percentage points year on year. This increase was a welcome development and shows it was recently more efficient because its expenses grew slower than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Haemonetics’s EPS grew at a decent 5.5% compounded annual growth rate over the last five years. Despite its adjusted operating margin expansion and share repurchases during that time, this performance was lower than its 6.6% annualized revenue growth, telling us the delta came from reduced interest expenses or taxes.

In Q4, Haemonetics reported EPS at $1.19, up from $1.04 in the same quarter last year. This print beat analysts’ estimates by 1.7%. Over the next 12 months, Wall Street expects Haemonetics’s full-year EPS of $4.23 to grow 20.1%.

Key Takeaways from Haemonetics’s Q4 Results

We struggled to find many positives in these results as its revenue and EBITDA missed Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 4.5% to $68.01 immediately after reporting.

Haemonetics’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.