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Here's Why You Must Buy Cardiovascular Systems' (CSII) Stock

Zacks Equity Research

Cardiovascular Systems, Inc. CSII has been gaining investor confidence on continued positive results. The company’s share price has outperformed its industry over the past year. The stock has gained 46.9% in comparison to the industry’s 4.2% rise and the S&P 500’s 0.9% increase in the said period.

This leading medical device manufacturer, which develops and commercializes innovative solutions to treat patients suffering from peripheral and coronary arterial diseases, including those with arterial calcium, has a market cap of $1.18 billion.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.

What’s Working in Favor of the Stock?

Focus on International Business

Cardiovascular Systems has been firing on all cylinders of late to expand its geographical presence. The company is progressing well with its objective to introduce Orbital Atherectomy System (OAS) globally. In this regard, management is upbeat about entering into an extended partnership agreement with OrbusNeich under which OrbusNeich will distribute Cardiovascular Systems’ coronary and peripheralOASs in multiple countries in Europe and Southeast Asia, outside the United States and Japan.

Moreover, the fiscal second-quarter global peripheral revenues included around $800,000 from the international distribution agreement with OrbusNeich as the company continued the launch in Asia, the Middle East and Europe. Notably, Cardiovascular Systems has earned $1.6 million in revenues in the quarter, led by strength in Japan.

Impressive Portfolio Expansion

Cardiovascular Systems has long been expanding its product portfolio to enhance market reach and versatility. Currently, the company is pursuing product improvement and evaluating technologies to strengthen and broaden its portfolio of powerful micro invasive tools. Cardiovascular Systems plans to launch more than 20 products in the next five years.

The company expects product launches to contribute to at least 10% of its core business growth in the second half of the year. These launches include the Teleport microcatheter, the coronary ViperWire Advance FlexTip, consistent expansion of the peripheral radial device along with the new ViperCath Radial Exchange Catheter and ViperWire FlexTip launches in the fiscal third quarter. The company is also planning the launch of peripheral exchangeable with GlideAssist later in fiscal 2019.

Market Dynamics

Currently, Cardiovascular Systems firmly stands to gain from several favorable trends existing in the peripheral artery disease (PAD) as well coronary artery disease (CAD) market spaces. According to estimates delivered by the American Heart Association (AHA), as many as eight to 12 million Americans suffer from PAD). Moreover, an aging population, coupled with increasing incidence of diabetes and obesity, is likely to propel the prevalence of PAD. Meanwhile, according to AHA estimates, 15.4 million people in the United States suffer from CAD.

Other Key Picks

Other top-ranked stocks in the broader medical space include Penumbra, Inc. PEN, Amedisys, Inc. AMED and Abbott Laboratories ABT.

Penumbra’s long-term earnings growth rate is expected at 20%. The stock carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Amedisys’ long-term earnings growth rate is projected at 18.8%. The stock carries a Zacks Rank #1.

Abbott’s long-term earnings growth rate is expected at 11.7%. The stock carries a Zacks Rank of 2.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

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