Inari Medical (NARI) Q3 Earnings and Revenues Beat Estimates
Inari Medical, Inc. NARI delivered earnings per share (EPS) of 5 cents in the third quarter of 2023 against the year-ago period’s loss of 19 cents per share. However, the figure surpassed the Zacks Consensus Estimate of a breakeven EPS.
Revenues in Detail
Inari Medical registered revenues of $126.4 million in the third quarter, up 31.4% year over year. The figure surpassed the Zacks Consensus Estimate by 3.6%.
Q3 Highlights
On the third quarter earnings call, Inari Medical’s management confirmed that 68% of its revenues were derived from the sale of FlowTriever Systems and 32% from the sale of ClotTriever and other systems.
On the same call, management also continued to make progress across the six products that are in full market release in the second half of 2023. Three of these products, REVCORE, InThrill and ProTrieve, add direct incremental revenue opportunities. Management also confirmed gaining good initial traction and is receiving excellent clinical feedback across all three products.
Per management, Inari Medical witnessed another quarter of record case and revenue production outside of the United States. Its performance was driven primarily by increased adoption in Western Europe, complemented by solid case growth in its early-stage markets in Latin America, Canada and Asia-Pacific. The company continues to make good progress in both China and Japan and anticipates beginning to treat patients in both these markets in 2024. Management expects its international business could represent greater than 20% of total revenues over time on the back of unmet needs.
During the reported quarter, NARI launched two new products — RevCore and T16 Curve catheter — both targeting patients with venous thromboembolism.
Inari Medical, Inc. Price, Consensus and EPS Surprise
Inari Medical, Inc. price-consensus-eps-surprise-chart | Inari Medical, Inc. Quote
Margin Trend
In the quarter under review, Inari Medical’s gross profit improved 31.4% to $111.9 million. The gross margin expanded 4 basis points (bps) to 88.5%.
We had projected 86.2% of gross margin for the third quarter.
Selling, general and administrative expenses rose 16.4% to $88.3 million. Research and development expenses increased 12.5% year over year to $21.5 million. The operating expenses of $109.8 million increased 15.6% year over year.
The operating profit totaled $2.1 million against the operating loss of $9.8 million in the year-ago period.
Financial Position
Inari Medical exited third-quarter 2023 with cash and cash equivalents and short-term investments of $351.3 million compared with $337.5 million at the end of the second quarter.
Cumulative net cash provided by operating activities at the end of third-quarter 2023 was $23.7 million compared with cumulative net cash used in operating activities of $25.2 million a year ago.
Guidance
Inari Medical has raised its financial outlook for the full year 2023.
For the full year, the company now expects revenues to be $490 million-$493 million, up from the prior-year outlook of $482 million-$492 million. The Zacks Consensus Estimate stands at $488.9 million.
Our Take
Inari Medical exited the third quarter of 2023 with better-than-expected results. The uptick in overall revenues was impressive. The company continued to make impressive progress with respect to its product portfolio, which saw robust product adoption. Geographical performances were also impressive. The gross margin expansion bodes well for the stock.
However, Inari Medical’s dismal bottom-line performances were disappointing. The company incurred an operating loss during the quarter, which raises our apprehension.
Zacks Rank and Other Key Picks
Inari Medical currently sports a Zacks Rank #1 (Strong Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories ABT, DexCom, Inc. DXCM and Integer Holdings Corporation ITGR.
Abbott, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
DexCom reported third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million surpassed the Zacks Consensus Estimate by 4%. It currently carries a Zacks Rank #2.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Integer Holdings reported third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.
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