Steady Global Growth, Product Launches Aid Hill-Rom Business

Recently, we issued an updated research report on Hill-Rom Holdings, Inc. (NYSE:HRC) . The company is witnessing a solid uptick in domestic revenues, driven by a sturdy performance in Patient Support Systems and Front-Line Care. The stock carries a Zacks Rank #2 (Buy), at present.

Shares of Hill-Rom have outperformed the broader industry in the past six months. The stock has depreciated 3.2% compared with the industry's 7.7% loss.

Hill-Rom exited first-quarter fiscal 2020 with better-than-expected earnings numbers. Core revenue growth was 6% year over year, falling at the high end of its guided range. The company registered robust domestic growth on sturdy performances of the Patient Support Systems. There was strong double-digit growth in Latin America and China for the second consecutive quarter.

Hill-Rom Holdings, Inc. Price

Hill-Rom Holdings, Inc. Price

Hill-Rom Holdings, Inc. price | Hill-Rom Holdings, Inc. Quote

Hill-Rom’s newly-initiated long-term growth strategies through fiscal 2022, focusing on all four strategic priorities look attractive at this moment. Hill-Rom’s merger and acquisition (M&A) pipeline continues to remain robust, as the company aggressively pursues acquisitions to accelerate growth in five key clinical focus areas. The company is also redirecting its focus on expansion through product development, which is reflected in its rising research and development expenditure. Progress in the company’s Digital Health Space and a favorable demographic trend also buoys optimism.

Contribution from new products was a significant top-line growth driver in 2019, adding approximately 300 basis points (bps) of growth. The company expects to roll out five-six new products each year through 2022. Product launches are projected to result in the contribution of approximately 200 bps of growth annually over the three-year plan.

However, global sales suffered due to the timing of large capital projects in some markets. Sales in Surgical Solutions’ dropped significantly due to the divestiture of surgical consumables.

Other Key Picks

Some other similar-ranked stocks from the broader medical space are ResMed Inc. (NYSE:RMD) , Medtronic plc (NYSE:MDT) and ICU Medical, Inc. (NASDAQ:ICUI) .

ResMed has a projected long-term earnings growth rate of 14.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medtronic’s estimated long-term earnings growth rate is 7.4%.

ICU Medical’s long-term historical earnings growth rate is 24.2%.

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