AngioDynamics (ANGO) Q4 Performance Dull, Competition Rife
On Jul 16, we issued an updated research report on AngioDynamics ANGO. It is currently one of the underperforming stocks in the MedTech space. A soft fiscal fourth-quarter performance and high debt levels raise concern.
The stock currently carries a Zacks Rank #5 (Strong Sell).
Over the last 60 days, the Zacks Consensus Estimate for AngioDynamics’ current-year earnings fell 7.5% to 86 cents.
AngioDynamics, Inc. Price and Consensus
AngioDynamics, Inc. Price and Consensus | AngioDynamics, Inc. Quote
What’s Acting Against the Stock?
AngioDynamics’ growth in the fiscal fourth quarter was offset by underperformance by the Venous Insufficiency business and PICC product lines. The Venous Insufficiency business saw a soft quarter primarily due to discontinuation of exclusive use of EVLT (Endovenous Laser System) products by the company’s largest customer.
Furthermore, the core Peripheral Vascular segment declined 2.5% on a year-over-year basis to $52.6 million. Per management, growth in the Fluid Management, Angiographic catheters and AngioVac product lines was offset by declines in the Venous Insufficiency and Thrombolytic businesses.
Vascular Access net sales totaled $23.7 million, down 2.4% from the year-ago quarter. Per management, growth in Ports and Dialysis products was offset by declines in PICCs.
AngioDynamics exited the fourth quarter with a high debt of $92.5 million. Higher debt levels impose certain operating and financial restrictions which limit the company’s execution of core business strategies. Additionally, it may cause the company to reduce or delay planned expansion and capital expenditures or sell assets.
Lastly, the company faces stiff competition from medical device bigwigs like Boston Scientific BSX and Merit Medical MMSI. Moreover, despite being able to sell off a bulk of its manufactured products, pricing pressure from GPO contracts could adversely affect selling prices and in turn profitability.
Over the past three months, the company’s shares have gained 1.9%, underperforming the S&P 500 index’s rally of 3.8%. The industry declined 4.4% over the same time frame.
A better-ranked stock in the broader medical space is Genomic Health GHDX.
Genomic Health has an expected earnings growth rate of 187.5%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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