Is It Time To Reassess Haemonetics (HAE) After The Recent Share Price Jump

• Wondering whether Haemonetics stock at around US$65.49 is starting to look attractive, or if the recent activity is masking valuation risks you should not ignore?
• The share price has moved sharply in the short term, with a 16.3% gain over the last 7 days and a 9.3% gain over the last 30 days, even though the year to date return is still down 18.1% and the 1 year return is down 0.9%.
• These moves sit against a longer 3 year period where the stock is down 21.3%, while the 5 year return is up 16.0%. This gives useful context when thinking about what is driving sentiment now. For investors, the mix of recent strength and mixed longer term results raises a clear question around whether the current price properly reflects the underlying value.
• Haemonetics currently has a valuation score of 4/6, based on being assessed as undervalued on 4 of 6 checks. The rest of this article will walk through those valuation approaches and finish with a way to look beyond the numbers to understand what that score really means for you.

Haemonetics delivered -0.9% returns over the last year. See how this stacks up to the rest of the Medical Equipment industry.

Approach 1: Haemonetics Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes the cash Haemonetics is expected to generate in the future, then discounts those projected cash flows back into today’s dollars to estimate what the stock could be worth now.

For Haemonetics, the latest twelve month Free Cash Flow is about $256.50m. Based on a 2 Stage Free Cash Flow to Equity model, analysts provide explicit projections through 2029, with Simply Wall St extrapolating further. By 2035, projected Free Cash Flow is $365.04m, with annual figures between 2026 and 2035 discounted back to today using the model’s required return.

Adding these discounted cash flows and a terminal value produces an estimated intrinsic value of $119.62 per share. Compared with a current share price of about $65.49, this implies the stock trades at a 45.3% discount to the model’s estimate, indicating the market is pricing Haemonetics below this DCF assessment.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Haemonetics is undervalued by 45.3%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Haemonetics.

Approach 2: Haemonetics Price vs Earnings

For a profitable company, the P/E ratio is a useful shorthand for how much investors are currently willing to pay for each dollar of earnings. It ties the share price directly to the bottom line, which is usually what drives long term returns.

What counts as a normal or fair P/E depends on how fast earnings are expected to grow and how risky those earnings are. Higher expected growth or lower perceived risk can justify a higher P/E, while lower growth or higher risk often lines up with a lower multiple.

Haemonetics currently trades on a P/E of 30.59x. That sits above the Medical Equipment industry average of 24.53x and below the peer group average of 37.31x. Simply Wall St also provides a Fair Ratio of 30.89x for Haemonetics, which is an estimate of what the P/E might be given its earnings growth profile, industry, profit margins, market cap and company specific risks.

This Fair Ratio is more tailored than a simple comparison with peers or the wider industry, because it adjusts for factors that can legitimately push a stock’s P/E higher or lower. With the Fair Ratio of 30.89x sitting very close to the current 30.59x, the stock appears to be priced at roughly its implied fair multiple.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your Haemonetics Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives take the numbers you have seen, such as fair value estimates and forecasts for Haemonetics' revenue, earnings and margins, and connect them to a clear story that reflects your own view of the company.

A Narrative on Simply Wall St is a short, structured story you choose or write that links what you think is happening in the business to specific forecast assumptions, and then ties those forecasts to a fair value that you can compare with the current share price.

These Narratives sit inside the Community page on the platform, are designed to be easy to use, and help you quickly see whether your chosen fair value suggests the stock looks cheap, expensive or roughly in line with the market price at any point in time.

Because Narratives are updated when new information such as earnings, clinical trial results or regulatory news is added, your story and the linked fair value move with the data instead of going stale.

For Haemonetics, one investor might choose a more cautious Narrative that lines up with a fair value of about US$64.00, while another might prefer a more optimistic Narrative closer to US$107.86. Comparing each of those to the current price can help you decide whether the stock fits your own expectations and risk tolerance.

For Haemonetics however we will make it really easy for you with previews of two leading Haemonetics Narratives:

🐂 Haemonetics Bull Case

Fair value in this bullish narrative: US$86.90

Gap to fair value at the recent US$65.49 price: about 24.7% below this narrative fair value

Revenue growth assumption: 5.28% a year

• Views the Vivasure acquisition, portfolio reshaping and software adoption as supportive for earnings quality and margin expansion over time.
• Assumes steady revenue growth, higher profit margins and a lower P/E than the wider US Medical Equipment industry by 2029 to reach a fair value of US$86.90.
• Flags key risks around reliance on a few core products, concentration in the US market and execution around Interventional Technologies and plasma volumes.

🐻 Haemonetics Bear Case

Fair value in this bearish narrative: US$64.00

Gap to fair value at the recent US$65.49 price: about 2.3% above this narrative fair value

Revenue growth assumption: 4.75% a year

• Stresses limits to growth from advances in bloodless surgery, reimbursement pressure and competition in Vascular Closure and Interventional Technologies.
• Builds in more conservative revenue and margin assumptions, along with a lower future P/E multiple, to arrive at a fair value of US$64.00.
• Highlights concentration in US markets, plasma cyclicality and ongoing cost pressures as factors that could constrain long term earnings and cash flow.

If you want to go beyond the previews and see how the community connects these assumptions to detailed forecasts, See what the community is saying about Haemonetics

Do you think there's more to the story for Haemonetics? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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