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Will Hurricanes Choke Cardiovascular (CSII) Q1 Performance?

Zacks Equity Research

Cardiovascular Systems, Inc.CSII expects fiscal 2018 first-quarter revenues to be affected by the devastating Harvey and Irma hurricanes. Earlier, the company had estimated revenues in the range of $52.6-$53.6 million for the quarter. However, taking effects of the hurricanes into account, the company anticipates a drop in first-quarter 2018 revenues from the previously guided range.

According to Cardiovascular Systems, more than 15% of the company’s revenues are generated from the Houston and Florida.The hurricanes have dented procedure volumes in the greater Houston area and throughout Florida. Moreover, fiscal first quarter revenues are more heavily weighted in September because procedure volumes start to pick up from summer levels. Thus, the company is not confident about meeting the previously guided range for first-quarter revenues.

Though management expects the short-term performance to be affected, the long-term prospects are likely to be untarnished.

 

In the majority of the last year, Cardiovascular Systems has been trading above the broader industry. Currently, the stock has gained 18.5%, higher than the 10.3% gain of the broader industry. However, the stock lost 7.4% after the announcement on Sep 18, 2017.

Estimate Revision Trend

The estimate revision trend has been unfavorable for the company. For the current quarter, no estimates moved north compared with one movement in the opposite direction over the last two months. As a result, the Zacks Consensus Estimate for the full year has fallen from 2 cents to a loss of 7 cents per share over the same period.

Zacks Rank & Key Picks

Cardiovascular Systemscarries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Edwards Lifesciences Corporation EW, Amedisys, Inc. AMED and IDEXX Laboratories, Inc. IDXX. Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Amedisys and IDEXX carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 19.8% over the last six months.

Amedisys has a long-term expected earnings growth rate of 18.2%. The stock has gained 5.7% over the last year.

IDEXX has a long-term expected earnings growth rate of 19.8%. The stock has gained around 45% over the last year.

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