William Blair & Company Initiates Coverage of Natus Medical Incorporated With Market Perform Rating

William Blair & Company initiated research coverage of Natus Medical Incorporated (Nasdaq: BABY) ($12.96), a pioneer in the newborn hearing screening market, with a Market Perform rating and Aggressive Growth company profile.

Associate Analyst Brian Weinstein estimated the company, which also participates in the newborn care and neurological diagnostics markets, would generate $167 million in revenue and $0.69 in earnings per share in 2008 and $191 million in revenue and $0.80 in earnings per share in 2009.

“Natus has built on its position as a trailblazer in the newborn hearing screening market with a combination of domestic and international acquisitions. As a result, Natus holds a 90% share in the U.S. market and an 80% share of the much smaller international market,” Weinstein said. “We expect international expansion to drive revenue going forward, and this is highlighted by our proprietary survey detailing several countries’ plans to expand screening over the coming years. Besides international expansion, Natus has new products in the newborn hearing screening and newborn care markets that should help support growth.”

Weinstein continued, “Although we are concerned about how the weakened state of the financial markets and the slowdown in hospital spending could affect the stock in the near term, we have a lot of respect for what this management team has been able to build and believe that there are numerous new growth drivers that should support growth. Until there is better visibility, however, we will stay on the sidelines.”

William Blair & Company, L.L.C. is a global investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their financial objectives. William Blair & Company is based in Chicago, with office locations including Boston, London, New York, San Francisco, Shanghai, Tokyo, and Zurich. For more information, please visit www.williamblair.com.

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