What Happened?
Shares of medical technology company Integer Holdings (NYSE:ITGR) fell 31.4% in the afternoon session after the company reported third quarter earnings which revealed a significant reduction in its full-year profit forecast.
For the third quarter, Integer met revenue expectations and beat profit forecasts on an adjusted per-share basis. However, investors focused on the negatives, including a significant 16.4% miss on adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), a key measure of profitability. The company's operating margin also declined compared to the same quarter last year. More concerning was the company's outlook. Management slightly lowered its full-year revenue guidance to a midpoint of $1.85 billion, which was 1% below analyst expectations. The cut to its full-year EBITDA forecast was even more severe, with the new midpoint of $322 million falling far short of the $402.3 million analysts had anticipated. This weak profit outlook for the remainder of the year appeared to be the primary driver behind the stock's steep sell-off.
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What Is The Market Telling Us
Integer Holdings’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Integer Holdings and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 13 days ago when the stock dropped 3.5% on the news that worries over worsening trade relations with China were triggered by critical comments from President Donald Trump. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market. The trade dispute flared up after China imposed export controls on rare earth minerals, which are critical components for high-tech manufacturing. The escalation of the trade war raises concerns about supply chain disruptions and increased costs for technology companies, which are heavily reliant on global trade, leading to a broad sell-off in the sector.
Integer Holdings is down 43.4% since the beginning of the year, and at $74.88 per share, it is trading 48.1% below its 52-week high of $144.36 from January 2025. Investors who bought $1,000 worth of Integer Holdings’s shares 5 years ago would now be looking at an investment worth $1,129.
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