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Cardiovascular Systems Rides on Innovation Amid Several Woes

Zacks Equity Research

On Aug 4, we issued an updated research report on St. Paul, MN-based Cardiovascular Systems, Inc. CSII. The company is a medical device manufacturer that develops and commercializes innovative solutions to treat patients suffering from peripheral and coronary arterial diseases, including those with arterial calcium.

For the majority of the last six months, Cardiovascular Systems has outperformed the broader industry with respect to price. Currently, the stock is up 15.4%, better than the 12.1% gain of the broader industry.

Cardiovascular Systems delivered remarkable fourth-quarter 2017 results, with earnings and revenues beating the Zacks Consensus Estimate. The company’s lower operating expenses drove the year-over-year improvement in earnings.

Strong revenue performance also contributed to the upside in earnings. Moreover, the improvement in margins is encouraging. Overall, the company’s fiscal 2017 performance has been impressive. The company’s fiscal 2018 guidance also instils confidence in investors.

Among the recent developments, Cardiovascular Systems has received FDA approval for radial access Diamondback 360 Peripheral Orbital Atherectomy Device. Also, the one-year results from the LIBERTY 360 study is to be presented at the 2017 Amputation Prevention Symposium (AMP).

On the flip side, the company operates in the competitive medical device industry, which gets significantly affected by product introductions. Failure to expand business overseas might hamper growth. Also, on the profitability front, Cardiovascular bears a long history of net losses since its inception in 1989 with no immediate recovery in sight. In fiscal 2017, the company incurred a net loss of $1.8 million. Management still expects to incur net loss of $2.8–$2.2 million in the first quarter of fiscal 2018.

Zacks Rank & Key Picks

Cardiovascular Systems has a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Edwards Lifesciences Corporation EW, INSYS Therapeutics, Inc. INSY and Align Technology, Inc. ALGN. Notably, Edwards Lifesciences, INSYS Therapeutics and Align Technology sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

INSYS Therapeutics has a long-term expected earnings growth rate of 20%. The stock posted a stellar four-quarter average earnings surprise of 60.7%.

Align Technology has an expected long-term adjusted earnings growth of almost 26.6%. The stock has added roughly 23.6% over the last three months.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has gained around 5.7% over the last three months.

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Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
Insys Therapeutics, Inc. (INSY) : Free Stock Analysis Report
Cardiovascular Systems, Inc. (CSII) : Free Stock Analysis Report
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
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