Integer Holdings Corporation ITGR wrapped up 2024 with a solid top-line performance. Fourth-quarter revenues of $449.5 million increased 8.8% year over year and outpaced expectations.

However, EPS of $1.43 missed estimates by 3 cents, reflecting short-term cost pressures. For 2025, Integer projects sales growth of 8-10% with adjusted operating income growth of 11-16%, signaling continued expansion with improving margins.

However, ITGR's share price has been down 4.4% since Feb. 20, following its fourth-quarter earnings release. The downtrend can be attributed to earnings miss and margin contraction. The company’s shares have gained 18% in the past year compared with the industry’s 1.7% growth.

But, can ITGR sustain this momentum? Let’s delve into the company’s key growth drivers and challenges for 2025, along with what investors should consider following the latest earnings report.

One-Year ITGR Price Vs Industry

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ITGR Cheaper Than Industry

Although ITGR’s shares have outperformed the industry in the past year, its valuation remained below the industry average. The company is trading at a P/E forward 12-month of 20.9X compared to the industry’s 32.01X. However, ITGR’s current valuation is trading at a premium to its five-year median of 18.53X.

ITGR Five-Year Valuation History

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Key Growth Drivers for ITGR in 2025

Integer’s organic sales are projected to grow 6-8% in 2025, outperforming the estimated market growth of 4-6%. This momentum is fueled by new product launches and strong demand in high-growth segments, such as electrophysiology, structural heart and neuromodulation. The company’s ability to get designed into next-generation medical devices continues to be a significant tailwind.

Additionally, Integer continues its aggressive tuck-in acquisition strategy, recently acquiring Precision Coating ($152M) and VSi Parylene ($28M) to expand its proprietary coating capabilities. These acquisitions are expected to contribute $59 million in revenues in 2025, reinforcing ITGR’s value proposition and reducing its reliance on external suppliers. Vertical integration will likely drive operating efficiencies and margin expansion.

Furthermore, Integer Holdings has made significant progress in manufacturing efficiencies, contributing to an adjusted operating income growth target of 11% to 16% in 2025, outpacing revenue growth. The company is optimizing its supply chain, leveraging cost management initiatives and ramping up new product launches to enhance profitability. Its emerging PMA (Pre-Market Approval) product sales are expected to witness a CAGR of 15% to 20% over the next three to five years.

Integer Holding’s investments in renal denervation, neuromodulation, and next-gen cardiac devices position it well to capitalize on the rising demand for innovative medical solutions. Additionally, its investment in a new Galway, Ireland facility reflects its commitment to scaling production to meet demand. This expanded footprint should enhance collaboration with key customers, particularly in Europe, and support growth in high-value cardiovascular and neurovascular markets.

Mixed Estimate Movement

ITGR’s earnings estimates suggest a mixed performance. While the earnings per share (EPS) estimate for first-quarter 2025 declined 3% in the past week, the same for the second quarter improved 1.4%. Meanwhile, the EPS estimate for full-year 2025 has remained unchanged at $6.01 for the past month.

Current sales and EPS estimates for 2025 suggest 7.5% and 13.4% growth, respectively.

EPS Estimate Revision

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Sales Growth Estimate

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Key Challenges for ITGR in 2025

While Integer Holding’s outlook is promising, several challenges remain. With a significant manufacturing presence in Mexico, it faces potential headwinds from new U.S. tariffs on imports. While medical devices may receive exemptions, the lack of clarity forces the company to formulate mitigation strategies, which could add complexity and costs.

Despite stabilization in labor and material costs, Integer Holdings is scaling multiple new product lines. Initial inefficiencies, workforce training and supply-chain adjustments could pressure gross margins in early 2025 before stabilizing in the latter half. As the company ramps up production to meet demand, maintaining cost control and operational efficiency would be critical to sustaining profit growth.

Investor Takeaway: Should You Buy, Hold, or Sell ITGR?

Integer’s strong growth trajectory, improving margins and strategic acquisitions make it an attractive long-term investment in the medtech sector. However, short-term risks tied to tariffs, integration execution and operational ramp-ups could create volatility. Investors with a long-term outlook may see ITGR as a solid buy, particularly if there’s any short-term price dip due to macroeconomic uncertainties. Meanwhile, those seeking more immediate returns should watch for execution risks before increasing exposure.

The company’s Value score of ‘B’, along with the same Growth score, implies that the recent fall in share price could be a temporary dip before resuming its uptrend in the future. However, the Momentum score of ‘A’ may lead to a decline in the share price for the time being. ITGR currently carries a Zacks Rank #3 (Hold). We caution investors against making any new investment in the stock currently. However, existing investors may continue to hold onto the shares, which may lead to further gains.

ITGR’s Zacks Rank and Stocks to Consider

Integer Holdings currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the industry have been discussed below.

Masimo MASI, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 6.1% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 14.41%. Its shares have risen 63.5% against the industry’s 1.9% decline in the past six months.

Alphatec ATEC, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 40% for 2025. Its earnings missed estimates in each of the trailing four quarters, delivering an average negative surprise of 12.60%.

ATEC’s shares have gained 77% against the industry’s 1.9% decline in the past six months.

Avenna Healthcare AVAH, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 666.7% for 2025.

AVAH delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March. Its shares have lost 21.8% in the past six months compared with the industry’s 2.9% decline.

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This article originally published on Zacks Investment Research (zacks.com).

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