MERIT MEDICAL SYSTEMS, INC.

Recommendation history

• Q1 2026HoldMerit delivered a strong Q1, with revenue of $381.9 million (+7% GAAP, +5% constant currency), 19.7% non-GAAP operating margin, $0.94 EPS and $24.7 million of free cash flow. However, organic constant-currency growth was only 3.7% excluding DualCap, OEM revenue fell 14%, and Q2 EPS guidance implies a year-over-year decline; the View Point acquisition adds upside but also execution and valuation risk. Hold rather than buy until OEM recovery and organic growth are demonstrated.
• Q3 2025BuyBuy: Merit delivered a clear Q3 beat, with revenue up 13% to $384.2 million, organic constant-currency growth of 7.8%, record 53.6% gross margin, 19.7% operating margin, and non-GAAP EPS of $0.92. Management raised 2025 guidance to 10.3%-11.2% constant-currency revenue growth, $3.66-$3.79 adjusted EPS, and at least $175 million of free cash flow, but the thesis still depends on WRAPSODY reimbursement approval and successful endoscopy integration.
• Q2 2025HoldMerit delivered a strong Q2: revenue was $382.5 million, up 13% year over year, organic constant-currency growth was 6.7%, non-GAAP operating margin reached a record 21.2%, and non-GAAP EPS grew 10%. FY2025 EPS guidance rose to $3.52-$3.72, but the WRAPSODY outpatient reimbursement error delays a major growth catalyst by two quarters, leaves 2025 WRAPSODY revenue at only $2-$4 million, and drives a weaker Q3 EPS outlook of $0.76-$0.85 versus $0.86 last year; the risk/reward is improved but not a clean buy.
• Q1 2025HoldMerit delivered a strong Q1: revenue was $355.4 million, up 9.8% GAAP and 10.9% constant currency, with 6% organic constant-currency growth, a 19.3% non-GAAP operating margin (+229 bps), and 15% non-GAAP EPS growth. However, management cut FY2025 non-GAAP EPS guidance to $3.29-$3.42 from $3.58-$3.70 because of $26.3 million of estimated tariff costs, 94% tied to China, with 83% of the impact expected in the second half; the operating execution is investable, but the risk/reward is not yet a clean buy.
• Q4 2024HoldMerit delivered a strong Q4—revenue was $355.2 million, up 9% GAAP, operating margin expanded 305 bps to 19.6%, and full-year free cash flow reached more than $185 million. However, FY2025 guidance of 8%–10% revenue growth and $3.58–$3.70 adjusted EPS was lighter than investor expectations, with only 5.3%–6.6% organic constant-currency growth, tariff exposure excluded, and Endoscopy execution still dependent on sales-force integration; the stock is a hold rather than a clean buy.
• Q3 2024BuyBuy: Merit delivered a strong Q3, with revenue of $339.8 million (+7.8% GAAP, +7.9% constant currency), non-GAAP operating margin of 19.2% (+175 bps), EPS of $0.86 (+21%), and nine-month free cash flow above $120 million (+116%). FY2024 guidance now calls for 7.4%-8.1% constant-currency revenue growth, adjusted EPS of $3.33-$3.38, and at least $150 million of free cash flow; Cook adds roughly $40 million of annualized 2025 revenue, while WRAPSODY provides substantial but still unquantified upside. The main tension is that OEM supply constraints, Cook integration, and unresolved FDA/reimbursement and adoption variables make the WRAPSODY thesis premature as a standalone valuation driver.
• Q2 2024BuyBuy: Merit delivered a strong Q2, with revenue of $338 million up 5.6% GAAP and 6.6% constant currency, operating margin up 92 basis points to 20.1%, EPS up 17% to $0.92, and record free cash flow of $57.9 million. The raised 2024 outlook calls for 6%–7% revenue growth, $3.27–$3.35 adjusted EPS, and at least $130 million of free cash flow; however, the thesis still depends on an OEM second-half ramp, China overcoming VBP pricing pressure, and successful WRAPSODY approval and commercialization.