LeMaitre Vascular Stock Is a Beaten-Down Medical Devices Play for 2019 In my search for small-cap contrarian ideas that could rally in 2019,... LeMaitre Vascular Stock Is a High-Prospects Play on Global Healthcare
LeMaitre Vascular Stock Is a High-Prospects Play on Global Healthcare

LeMaitre Vascular Stock Is a Beaten-Down Medical Devices Play for 2019

In my search for small-cap contrarian ideas that could rally in 2019, I’m intrigued by the opportunity in LeMaitre Vascular Inc (NASDAQ:LMAT), a developer of innovative devices and solutions geared to battle vascular diseases.

Given that LMAT stock is down 36% over the past three months and 45% from its April 2018 high, I see an aggressive opportunity after the move to the 52-week low of $21.79 on December 24.

With a market cap at around $445.0 million, LMAT stock is small and is delivering revenue growth along with positive earnings before interest, taxes, depreciation, and amortization (EBITDA), profits, and free cash flow (FCF).

LeMaitre Vascular‘s pipeline comprises of a broad range of vascular devices, implants, and services used to treat peripheral vascular disease. In all, there are 14 product lines offered in over 80 countries.


The company has grown both organically and via an aggressive acquisition path that included 19 companies during the last two decades.

On the chart, LMAT stock has been on a nasty sell-off after failing to hold its previous sideways channel between $26.00 and $29.00. LMAT displayed a bearish death cross and large downside trade gap.

Chart courtesy of

In my view, LeMaitre Vascular stock could rally back toward $30.00 if the broader market stabilizes.

Strong Fundamentals Support Bull Case for LMAT Stock

LMAT stock has delivered higher sequential revenues in four consecutive years from $63.9 million in 2013 to $100.9 million in 2017. The growth in 2016 and 2017 was above the four-year compound annual growth rate (CAGR) of around 12.1%.

Fiscal Year Revenue (Millions) Growth
2013 $63.9
2014 $70.4 10.2%
2015 $77.6 10.2%
2016 $89.2 14.9%
2017 $100.9 13.1%

(Source: “LeMaitre Vascular Inc.,” MarketWatch, last accessed January 2, 2019.)

The concern among investors is the expected decline in the revenue growth rate that will need to be addressed by LeMaitre Vascular.

In 2018, it’s estimated that the company grew its revenue by 2.2% to $103.1 million. In 2019, it’s estimated to come back with an improved 8.3% growth rate—to $111.7 million. (Source: “LeMaitre Vascular, Inc. (LMAT),” Yahoo! Finance, last accessed January 2, 2019.)

LeMaitre Vascular produces positive EBITDA with strong growth from 2014 to 2017.

Fiscal Year EBITDA (Millions) Growth
2013 $7.4
2014 $10.6 42.6%
2015 $14.6 37.7%
2016 $19.9 36.0%
2017 $25.2 26.3%

(Source: MarketWatch, op cit.)

The company also produces profits with strong growth in four consecutive years.

The impressive fact is that LeMaitre Vascular has grown its EBITDA and profits at a higher rate than revenues.

Fiscal Year Diluted Earnings Per Share Growth
2013 $0.20
2014 $0.23 15.0%
2015 $0.42 82.6%
2016 $0.55 31.0%
2017 $0.86 56.4%

(Source: Ibid.)

LMAT is predicted to have increased its earnings to $1.09 per diluted share in 2018. Looking ahead, its earnings are predicted to be as much as $1.15 per diluted share in 2019.

On its balance sheet, LeMaitre Vascular has not carried any debt in five straight years. This fact will help LMAT as interest costs rise.

In addition, LeMaitre Vascular generates positive free cash flow with growth in four straight years. The positive FCF will allow the company to continue with its strong dividends, which offers investors some downside cushion.

Fiscal Year Free Cash Flow (Millions) Growth
2013 $2.7
2014 $4.3 63.4%
2015 $9.2 111.3%
2016 $14.1 53.4%
2017 $16.5 17.1%

(Source: Ibid.)

Analyst Take

Investors interested in healthcare growth stocks may want to look at LeMaitre Vascular stock.

The fact that 225 institutions hold 83% of the outstanding shares suggests LMAT is doing something right. (Source: Yahoo! Finance, op cit.)

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