Von the Japanese market entrance with Mizuho Medical is a very, very powerful input to the model (see response to Endo in Q3 2014 Estimate blog). I would also like to see them submit the LUNA for approval and was surprised not to see it mentioned. This would be a good question for the upcoming conference call. The India initiative is also a great potential move, though of perhaps smaller scale. With Arun possibly having better knowledge of and contacts, combined with the fact that Canada rather than the US is the source of the companies roots, India may be a much bigger factor than it is with ISRG in the overall international market.
This is one to watch....you are correct..."Strong Buy".
I have no inside information Endo. There is no source of verifiable sales that I have found. The number is based on a theoretical modeling approach I use that mimics System Dynamic Modeling. This modeling instead of using linear techniques like Excel has a "feedback" capability from endogenous factors that influence time dependent results. Sounds like a lot of gobbledygook but if you can calibrate the endogenous feedback loops so that they are close to the actual system response, the modeling is extremely powerful. Some of the latest inputs that have or will shortly have inflection moving impacts are:
1) effective marketing (trained and motivated marketing personnel)
2) adoption by a nationally recognized Wound Care Organization
3) approach of the "zero point" of the second derivative of the adoption curve--for every adoption curve (I use a 3 parameter sigmoidal function--an "S" curve) there is a maximum acceleration point--just at the bottom of the curve where adoption transitions from "early adopters" to "general acceptance". The analyst are the most "surprised" at this point and there are usually a series of under estimates by the financial community and gapping ups after earnings announcements.
It may not happen this quarter, but it will. When I used this modeling approach for ISRG I was able to more accurately predict revenue and earnings than any of the analyst and even the company for years. We will see. If my timing is off and it is very difficult to calibrate the critical parameters with so few historical data points. But this is my current best guess.
I am also curious as to how you came up with that revenue number. My recollection of Arun's comments at the last CC was that he expected 3rd quarter revenue to grow by about 35%, slightly below their basic projection of 40%. He then stated that he expected 4th quarter revenue growth to exceed the 40%, bringing overall growth for the second half of 2014 to 40%.
Utilizing those projections and the fact that 3rd quarter 2013 revenue came in at $8.9 million, I'm expecting revenue in the $12 million range, hopefully no lower. I would love to see your number of $14.9 million in revenue, but I honestly don't see how such a number is possible given Arun's comments.
Novadaq Technologies Signs Agreement to Push Into Japan Pending Regulatory Approval
BY Midnight Trader
— 2:28 PM ET 10/22/2014
Novadaq Technologies (NVDQ) which makes clinically relevant fluorescence imaging solutions for use in surgical and diagnostic procedures, said late Tuesday it entered into an exclusive five-year agreement with Mizuho Medical Corp. for distribution of the PINPOINT Endoscopic Fluorescence Imaging System in Japan. The news provided little traction for shares which trade down more than 4% Wednesday afternoon. Shares traded as low as $10.65, nearing a test of the $10.35 52-week low. Dr. Arun Menawat, Novadaq's (NVDQ ) CEO, said "Mizuho currently supplies products to 70% of all Japanese operating rooms. They have in-depth knowledge of the hospital sales process in Japan and strong relationships with hospital and surgeon customers, which once regulatory approvals are obtained, will provide rapid access to the targets for PINPOINT." Novadaq (NVDQ) and Mizuho Medical have applied for appropriate regulatory approvals in Japan for PINPOINT. Subject to those approvals being obtained during the first half of 2015, commercialization is expected to begin in the second half of 2015.
Sentiment: Strong Buy
It's not manipulation. It's a market that has lost confidence in a CEO and the company's inability to deliver on it's own projections. Unless and until their credibility is restored, the stock will languish. Lets see what the next set of numbers look like. If they are bad....look out below!
Anncmnt after close - did not garner much attention. But Arun is doing a nice job expanding the co's reach these past 2 weeks w/ formal distribution deals in India and now Japan. This will begin to matter in a material way 2H15, 2016-2017.
Firefly is standard for the Xi units. Also previous Xi units that were sold had the Firefly included but were not charged as revenue since they were not FDA approved, this would contribute to the upside surprise on the Revenue.
As with other long term shareholders here, I do not believe the market is rift with conspiracies. However, the price of a relatively lightly traded stock can be readily manipulated by a big institutional player.
In early April the stock was at $24 and it was unquestionably overbought. When the momentum players sold the stock dropped into the high teens. The situation was exacerbated by a 130% increase in the short position from 1 million shares to 2.3 million. The stock continued to drop and reached a low in the middle of June of about $13.50. During the last 15 days of the 2nd quarter the stock price recovered and closed the quarter at $17.05.
We subsequently learn that during this incredibly trying quarter for this stock, one player, Fidelity increased its position by 2.7 million shares to 4.6 million shares. An increased investment of at least $40 million. Draw your own conclusions.
In spite of a continued stream of solid good news related to its products the stock has continued to drop and theshort position grow. Sure, some of this drop can be layed at the door step of a substantial market decline. But as I indicated in a previous posting, we are now selling at a price lower then the price of the stock in April of 2013, before we announced the preliminary results of Pilar I. Hard not to conclude that there is some substantial manipulation going on here.
Thanks. That was excellent and shows what our equipment can bring to the operating room.
There is also an excellent article in Today's Wound Care, 10/19/14. Also a very worthwhile read that outlines what Luna can bring to diagnosing diabetic patients. This article was brought to my attention by bussybob on another message board.