Smith & Nephew plc SNN recently received 510(k) clearance from the Food & Drug Administration (FDA) for a stemless anatomic total shoulder for the AETOS Shoulder System (AETOS Stemless). 

The AETOS Shoulder System, including AETOS Stemless, is the latest solution in Smith+Nephew’s expanding Upper Extremity portfolio. 

SNN’s Likely Stock Trend Following the News

Following the announcement, shares of SNN moved 0.8% south to $25.32 yesterday.  

Total shoulder arthroplasty is one of the fastest-growing segments in Orthopaedics, with an estimated 250,000 procedures annually in the United States by 2025. The company has been gaining synergies from its expanding Upper Extremity portfolio, which complements the market-leading Sports Medicine shoulder repair and biologics solutions. Henceforth, we expect the latest FDA clearance to motivate market sentiment in favor of SNN stock in the upcoming days. 

SNN currently has a market capitalization of $10.95 billion. The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $5.78 billion, which suggests 10.9% growth from the fiscal 2023 reported number.

About SNN’s AETOS Stemless

AETOS Stemless addresses the growing demand for anatomic total shoulder replacement. Its small operating room footprint allows for an efficient procedure. It is designed to maximize metaphyseal fixation and stability, with an inlay collar, cruciate fins and a porous titanium coating to encourage biological fixation.

The stemless anatomic total shoulder represents a significant advancement in shoulder arthroplasty by personalizing surgery, which provides options that help surgeons give patients the best chance for recovery. 

About SNN’s AETOS Shoulder System 

Introduced last year, the AETOS Shoulder System delivers an elegant design and an elevated experience through its simplicity, uniformity and flexibility. The new stemless implant expands the AETOS Shoulder System portfolio, enabling streamlined convertibility from Stemless to Meta Stem. 

It is cleared for use in the United States and approved for use in Canada.

Industry Prospects Favor SNN

Per a report from Fact.MR, the global shoulder arthroplasty market was valued at $1.57 billion in 2023 and is projected to reach $2.32 billion by 2033 at a compound annual growth rate of 4%. Key market growth drivers include the rapidly increasing cases of shoulder arthritis and the rising aging population. 

Recent Developments by Smith & Nephew

In October, the company inked a co-marketing agreement with JointVue for its patented OrthoSonic 3D Surgery Planning Technology. It is the only ultrasound device currently on the market to deliver 3D preoperative planning. Under the agreement, JointVue’s technology allowed surgeons to use Smith+Nephew’s CORI Surgical System for robotic-assisted knee arthroplasty to create a personalized surgical plan. 

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The same month, Smith & Nephew launched the LEGION Hinged Knee (HK) System in the United States with proprietary OXINIUM (Oxidized Zirconium) implant technology that delivers the durability of metals, the wear resistance of ceramics and corrosion resistance better than both. 

SNN’s Price Performance

In the past year, shares of SNN have lost 4.6% against the industry’s 13.9% growth. 

SNN’s Zacks Rank and Key Picks

SNN currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Penumbra PEN and ResMed RMD, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. The company’s shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for HAE’s 2025 EPS have moved north 0.4% to $4.59 in the past 30 days. 

Estimates for Penumbra’s 2024 EPS have moved north 8.1% to $2.79 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

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