LEMAITRE VASCULAR INC (NASDAQ:LMAT) – A Quality Stock Worth Considering

LEMAITRE VASCULAR INC (NASDAQ:LMAT) was identified as a potential quality investment through our Caviar Cruise stock screener. The company demonstrates strong financial health, profitability, and growth metrics, making it an interesting candidate for investors focused on long-term quality holdings. Below, we examine why LMAT meets the criteria for quality investing.

Key Strengths of LMAT

• Revenue and EBIT Growth: Over the past five years, LMAT has delivered a revenue growth rate of 9.07% annually, while EBIT growth has been even stronger at 19.77%. This indicates improving profitability and operational efficiency.
• High Return on Invested Capital (ROIC): With an ROIC of 31.73%, LMAT generates significant returns on its capital investments, well above the 15% threshold set in our quality screen.
• Strong Profit Quality: The company converts net income into free cash flow at an impressive rate, with a five-year average profit quality of 110.46%, signaling reliable earnings.
• Manageable Debt: LMAT’s debt-to-free cash flow ratio stands at 4.09, meaning it could theoretically repay its debt in just over four years using current cash flows—a sign of financial stability.

Fundamental Analysis Summary

Our fundamental report assigns LMAT a rating of 7 out of 10, reflecting solid performance across key areas:

• Profitability: Scores 8/10, with strong margins (19.96% profit margin, 23.43% operating margin) and high returns on equity (12.99%) and assets (8.12%).
• Health: Scores 7/10, supported by a robust current ratio (16.49) and quick ratio (13.83), indicating strong liquidity.
• Growth: Past revenue and earnings growth have been solid, though future growth expectations are slightly more moderate.
• Valuation: While the P/E ratio (42.47) appears high, it is relatively cheaper compared to industry peers.

Why Quality Investors Should Take Note

LMAT operates in the medical device sector, providing essential vascular surgery products—a market with steady demand. The company’s ability to grow revenue, expand margins, and generate high returns on capital suggests a durable competitive advantage. While valuation is not cheap, quality often comes at a premium.

For more quality stock ideas, explore our Caviar Cruise screener, updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.