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Here's Why You Should Hold on to AngioDynamics Stock Now

Zacks Equity Research

AngioDynamics, Inc. ANGO is likely to gain from a series of lucrative acquisitions and a strong view for fiscal 2020. However, headwinds in Vascular Access (“VA”) are currently plaguing the stock.

In a year’s time, shares of AngioDynamics have slipped 28.3% compared with the industry’s 14.3% rise. Meanwhile, the S&P 500 Index has rallied 33.5%.

With a market capitalization of $578.2 million, AngioDynamics designs, manufactures and sells a wide range of medical, surgical and diagnostic devices. The company’s devices are generally used in minimally invasive, image-guided procedures. The company’s earnings are anticipated to grow 150% in the next fiscal. The trailing four-quarter positive earnings surprise is 70.6%, on average.

Let’s delve deeper into the factors that substantiate AngioDynamics’ Zacks Rank #3 (Hold) at present.

AngioDynamics, Inc. Price and Consensus


AngioDynamics, Inc. Price and Consensus
AngioDynamics, Inc. Price and Consensus

AngioDynamics, Inc. price-consensus-chart | AngioDynamics, Inc. Quote

Factors to Boost AngioDynamics

AngioDynamics recently announced the acquisition of the C3 Wave PICC tip location system from Medical Components Inc. Notably, the latest buyout is expected to boost the company’s PICC product line, which has been performing dismally of late.

Additionally, the company recently took over Eximo Medical Ltd. — an early commercial stage medical device company — and its proprietary 355nm wavelength laser-technology platform. Notably, Eximo’s laser technology will complement AngioDynamics’ existing Vascular Interventions and Therapies (“VIT”) product portfolio.

For investors’ notice, AngioDynamics’ VIT revenues grossed $31.2 million, up 0.6% from the year-ago quarter’s figure in the fiscal second quarter. Per management, strong growth in AngioVac and core VIT product lines drove quarterly revenues.

Management at AngioDynamics expects more product launches from the Eximo integration in the second half of fiscal 2020.

Reflective of this, AngioDynamics kept its guidance unchanged.

For fiscal 2020, AngioDynamics continues to expect revenues at the $280-$286 million band. Adjusted earnings per share are projected between 10 cents and 15 cents.

What’s Deterring the Stock?

In the fiscal second quarter of 2020, AngioDynamics’ VA revenues amounted to $22.8 million, down 4% on a year-over-year basis. Per management, lower sales of Ports and PICCs impeded quarterly growth.

Also, quarterly bottom line of 6 cents declined year over year.

Which Way Are Estimates Headed?

For fiscal 2020, the Zacks Consensus Estimate for revenues is pegged at $281.4 million. For adjusted earnings, the same stands at 12 cents.

Key Picks

Some better-ranked stocks in the broader medical space are Cerner Corporation CERN, DexCom DXCM and HealthEquity HQY. While HealthEquity sports a Zacks Rank #1 (Strong Buy), Cerner and DexCom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..

Cerner’s long-term earnings growth rate is 13.6%.

DexCom’s fourth-quarter earnings growth rate is projected at 31.5%.

HealthEquity’s long-term earnings growth rate is 25%.

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