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Positive Market Trends Aid Cardiovascular Systems Amid Woes

Zacks Equity Research

On Jan 16, we issued an updated research report on Cardiovascular Systems, Inc. CSII. The company is a medical device manufacturer developing and commercializing innovative solutions to treat patients suffering from peripheral and coronary arterial diseases including those with arterial calcium.

Shares of Cardiovascular Systems have outperformed the broader industry in the past 30 days. The stock is up 10.2%, better than the broader industry’s 2.9% gain.

 

Cardiovascular Systems, Inc. Price

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

 

A strong revenue performance has been consistently contributing to the upside in earnings of late. Also, an improved gross margin is encouraging. Additionally, the company’s fiscal 2018 guidance instills confidence in investors.

Cardiovascular Systems firmly stands to gain from several favorable trends existing in the peripheral artery disease (PAD) as well as coronary artery disease (CAD) market spaces. Per estimates delivered by the American Heart Association, as many as 8-12 million Americans suffer from PAD. Moreover, an aging population coupled with increasing incidence of diabetes and obesity, is further likely to propel the prevalence of PAD. This offers a huge scope for the unique PAD Orbital Atherectomy System (OAS) of Cardiovascular Systems.

Per management, another major concern is underdiagnosis with patients failing to show symptoms and/or physicians misinterpreting the same. So we believe, the PAD market space is still underpenetrated at large, providing Cardiovascular Systems with significant opportunities to expand in the market place.

Among the recent developments, this St. Paul, MN-based Cardiovascular Systems has received an FDA approval for Radial Access Diamondback 360 Peripheral Orbital Atherectomy Device. Besides, the company has been conferred with a grant from Japan’s Ministry of Health, Labor and Welfare for the Diamondback 360 Coronary OAS Micro Crown.

On the flip side, the company operates in the competitive medical device industry, significantly affected by product introductions. Failure to expand business overseas might hamper growth. Also, on the profitability front, Cardiovascular Systems has a long history of net losses since its inception in 1989 with no immediate recovery in sight. Management still expects to incur net loss of $1-$1.9 million or loss per share of 3-6 cents in the second quarter of fiscal 2018.

Zacks Ranks & Key Picks

Cardiovascular Systems carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Bio-Rad Laboratories Inc. BIO, Neogen Corporation NEOG and Humana Inc. HUM, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank Stocks Here.

Bio-Rad has a massive projected growth rate of 141.46% for the first quarter of 2018. The stock has outperformed the broader industry, gaining 14.2% in the last three months.

Neogen has a long-term projected growth rate of 15%. In the last six months, the stock has rallied 21.6%, surpassing the industry’s gain.

Humana has an expected growth rate of 15.6% in the first quarter of 2018. Over a month, the stock has gained 9.7% above the industry’s return.

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Bio-Rad Laboratories, Inc. (BIO) : Free Stock Analysis Report
 
Neogen Corporation (NEOG) : Free Stock Analysis Report
 
Cardiovascular Systems, Inc. (CSII) : Free Stock Analysis Report
 
Humana Inc. (HUM) : Free Stock Analysis Report
 
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