Wondering if Merit Medical Systems is trading at a bargain or if that ship has sailed? You are not alone; it is a common question for investors sizing up this healthcare stock.
The stock has seen a gentle rebound lately, up 2.5% over the last week and 3.2% this month, though longer-term returns remain muted with a -17.2% drop over the last year.
Recent headlines highlight increased interest in the company’s expanding medical device portfolio, as well as continued partnerships in the U.S. and abroad. These developments have offered a glimmer of optimism amid a period of share price volatility.
On a pure numbers basis, Merit Medical Systems currently scores 0 out of 6 on our core valuation checks, suggesting it may not be undervalued by traditional metrics. Stick around, as we will break down exactly how these checks work and reveal a smarter way to evaluate value later in the article.
Merit Medical Systems scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Discounted Cash Flow (DCF) model estimates a company’s worth by forecasting future cash flows and discounting them back to today’s value to reflect risk and the time value of money. DCF is one of the most widely used valuation tools for fundamental investors.
For Merit Medical Systems, the DCF calculation starts with the company’s current Free Cash Flow, which is $213 million. Based on analyst forecasts, Free Cash Flow is projected to grow steadily, reaching $229 million by the end of 2027. Beyond that, future projections are extrapolated, with cash flows expected to rise gradually each year and reach roughly $295 million in 2035.
The DCF analysis uses these cash flow projections to arrive at an intrinsic value per share of $77.71. When compared to the current share price, the result suggests the stock is trading about 12.2% above its DCF-assessed fair value. This implies it may be overvalued at recent prices.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Merit Medical Systems may be overvalued by 12.2%. Discover 917 undervalued stocks or create your own screener to find better value opportunities.
MMSI Discounted Cash Flow as at Nov 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Merit Medical Systems.
The price-to-earnings (PE) ratio is a popular valuation metric, especially for profitable companies like Merit Medical Systems. It reflects the amount investors are willing to pay today for each dollar of the company’s earnings. Generally, a higher PE suggests expectations of stronger future growth, while a lower PE may mean slower growth or higher perceived risk.
Currently, Merit Medical Systems is trading at a PE ratio of 43.7x. This is significantly above both the medical equipment industry average of 28.0x and the average among its peers of 27.0x. While surface-level comparisons might suggest the stock is expensive based on earnings, it is important to consider more than just benchmarks when judging if a valuation is fair.
Simply Wall St’s proprietary “Fair Ratio” aims to provide a more accurate assessment than a simple comparison to industry or peers. This measure accounts for factors such as Merit Medical’s earnings growth, profit margin, industry landscape, company size, and inherent risks. According to the Fair Ratio, Merit Medical should be valued at 23.3x earnings, notably less than its current PE.
Comparing Merit Medical Systems’ actual multiple to its Fair Ratio, the current PE is well above what would be considered fair given its growth prospects and risk profile. This points to the stock being overvalued on this metric.
Result: OVERVALUED
NasdaqGS:MMSI PE Ratio as at Nov 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.
Earlier, we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your own story about a company; it connects your perspective and expectations for things like future revenue, earnings, and margins to a forecast and, ultimately, a fair value. Narratives make investing more accessible, as they are available right inside the Simply Wall St platform’s Community page, used by millions of investors. By comparing your Narrative’s Fair Value to the market Price, you get a clear signal on when a stock might be a buy or a sell according to your view. As company news and earnings are released, Narratives update automatically to reflect new information, keeping your analysis current. For example, when analyzing Merit Medical Systems, one investor might be optimistic, assuming rapid margin expansion and targeting a future price of $122 per share. Another might focus on reimbursement delays or industry risks, setting a much more cautious target of $90. Narratives let you see and compare these perspectives clearly, helping you make truly informed investment decisions tailored to your own outlook.
Do you think there’s more to the story for Merit Medical Systems? Head over to our Community to see what others are saying!
NasdaqGS:MMSI Earnings & Revenue History as at Nov 2025
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.
Companies discussed in this article include MMSI.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
