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Cardiovascular Systems Rides on New Products Amid Tight Race

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On May 21, we issued an updated research report on Cardiovascular Systems, Inc. CSII. Notably, a number of factors continue to drive optimism for the stock. For instance, the company’s firm position in the coronary arterial disease (CAD) and peripheral arterial disease (PAD) market spaces, positive study results highlighting its effective technologies, an impressive portfolio expansion as well as a strong gross margin scenario. The player carries a Zacks Rank #3 (Hold).

This medical device manufacturer, developer and marketer of innovative solutions, which  treat patients with peripheral and coronary arterial diseases including those with arterial calcium, saw a solid third quarter of fiscal 2018. The company witnessed a year-over-year rise in revenues at both CAD and PAD businesses. Also, the gross margin expansion was impressive. 

Over the past three months, shares of Cardiovascular Systems have outperformed its industry. The stock has surged 32.2% compared with  the 5.1% increase of the industry.

The company is putting efforts to innovate products through R&D investments. The market is also looking forward to its recently-launched coronary device in Japan, reflecting the company’s focus on widening international footprint.

Cardiovascular Systems, Inc. Price

Cardiovascular Systems, Inc. Price | Cardiovascular Systems, Inc. Quote


Cardiovascular Systems has been broadening its product portfolio to enhance the market reach. It is currently pursuing product improvement and evaluating new technologies to strengthen and develop its portfolio of powerful micro invasive tools.

We are also upbeat about Cardiovascular Systems’ new partnership, which has helped extending its portfolio. The company is now the U.S. distributor of OrbusNeich balloon products. OrbusNeich PCI balloons include the Sapphire II Pro, which has recently received an FDA approval for the 1.0 mm coronary balloon. Moreover, the company has signed an original equipment manufacturer agreement with Integer Holdings Corporation for CSI-branded ZILIENT guidewires.

Additionally, we are optimistic about the favorable trends in the PAD and CAD spaces. Per American Heart Association, as many as 8-12 million Americans suffer the PAD syndrome. Moreover, an aging population coupled with rising incidence of diabetes and obesity is likely to aggravate the frequency of PAD complaints. Thus, the company’s growth in these areas offers a huge scope for the unique PAD Orbital Atherectomy System (OAS) of Cardiovascular Systems to address the hitherto unmet needs in the market.

On the flip side, the company faces cutthroat competition in the niche space. Its OAS products contend with a variety of other products or devices for the treatment of vascular disease including stents, balloon angioplasty catheters and atherectomy catheters as well as products used in vascular surgery. Larger players contesting in the stent and balloon angioplasty market segments include bigwigs like Abbott Laboratories ABT. Moreover, on the profitability front, Cardiovascular Systems struggles with a long history of net loss since its inception in 1989 with no immediate recovery in sight. 

Key Picks

Some better-ranked stocks in the broader medical sector are Intuitive Surgical ISRG and Amedisys, Inc. AMED. While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Amedisys carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical has a long-term expected earnings growth rate of 12.1%.

Amedisys has a long-term expected earnings growth rate of 17.5%.

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