Medacta: Swiss Medical Technicians on Growth Course

Last Updated: 23. November 2023By

When you think of a medical stock from Switzerland, you may first think of pharma stocks. But there are some interesting stocks in the medical technology sector as well. Introducing a cutting-edge Swiss medical technology company, Medacta:

Medacta is a small, but impressive medical technology company from Switzerland, whose annual turnover has now grown to around 500 million euros. It produces artificial joints and special surgical instruments and systems, which can keep the cutting area much smaller than with the usual joint replacement.

Many Innovations In terms of innovation, the Swiss do not have to hide from the larger medical technology competitors from the US. With the NextAR technology, an innovative system with augmented reality (the combination of digital objects in a real environment) was introduced. Virtual information can be displayed directly in the glasses. It allows for a comparably precise surgery, similar to competing robot systems, but is much cheaper than these.

Last year, Medacta also introduced MyKnee to the market. It is a personalized interactive 3D planning before the operation and a set of 3D printed guide blocks. These templates are placed on the existing primary implant in the knee to facilitate the correct positioning of new implants.

Strong first half of the year In the first half of the year, business was going smoothly. The Swiss medical technology specialist reported a significant increase in turnover of +21% to 255.1 million euros for the first six months of 2023. This easily surpassed the average analyst forecast of 242.7 million euros.

The operating profit rose by +24% to 71.9 million euros. This was even more remarkable as Medacta simultaneously made additional investments for its expansion.

The growth was driven by all important business areas and sales regions of the group. Growth drivers were especially the knee products with +28% to 98.5 million euros as well as the extremities business area, which includes shoulder products, increasing turnover by +39% to 17.9 million euros. The spine business achieved a turnover of 41.5 million euros, which corresponds to a growth rate of +23%.

Raising annual forecast For the full year 2023, Medacta has increased its turnover forecast. The company expects a turnover growth of between +15 and +18%, which is 5 percentage points higher than before.

Share comparatively moderately valued The price-earnings ratio (P/E) of 29 for the coming year may not look like a bargain at first glance. But given the expected significantly increasing profit margins (as the profits will show higher growth rates in the coming years than the turnover), the share is relatively moderately valued compared to US competitors with similar growth prospects.