Reasons to Retain ShockWave Medical (SWAV) in Your Portfolio
ShockWave Medical, Inc. SWAV is well poised for growth, backed by its research and development (R&D) efforts, and its focus on clinical studies.
Shares of this presently Zacks Rank #3 (Hold) company have lost 33.7% compared with the industry’s 3.2% decline, in the past six months. The S&P 500 Index has fallen 3.7% in the same time frame.
With a market capitalization of $7.1 billion, this medical device company is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated. ShockWave Medical’s earnings yield of 2.01% compares favorably with the industry’s 7.76%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 118.36%.
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What’s Driving Its Performance?
ShockWave Medical invests in R&D efforts to accelerate its IVL Technology, thereby broadening and enhancing its existing product offerings. In the fourth quarter of 2022, SWAV incurred R&D expenses of $23.7 million, up 61.2% from the prior-year quarter’s figure.
For 2023, Shockwave Medical expects revenues in the range of $660-$680 million, implying growth of 35-39% from the previous year’s level.
SWAV believes in its ability to rapidly develop innovative products, owing to a dynamic product innovation process. The versatility and leveraging ability of its core technology and management philosophy continues to improve the R&D process. Shockwave Medical recruited and retained engineers and scientists with substantial expertise in developing medical devices. SWAV’s pipeline of products in various stages of development is anticipated to provide additional commercial opportunities.
Since its inception, ShockWave Medical has been committed to generating clinical data to show the safety and effectiveness of its IVL Technology. These initial studies consistently highlighted low rates of complications irrespective of the type of vessel being examined. Apart from getting regulatory approvals or clearances, data from SWAV’s clinical studies strengthens its ability to drive the adoption of Intravascular Lithotripsy (IVL) Technology throughout multiple therapies in its existing and new market segments.
ShockWave Medical’s past studies guided optimal IVL procedure technique and enriched the design of its IVL System and products in development. Management is optimistic about the continued clinical acceptance and penetration of IVL, as demonstrated by its strong results in the quarter under review as well as a higher outlook for revenues in 2023.
The company has ongoing clinical programs for several products and indications. On being successful, these will enable SWAV to expand the commercialization of its products into new geographies and indications.
Shockwave Medical received regulatory approval for the Shockwave C2 Coronary IVL Catheter in Japan in 2022. Besides, SWAV announced the introduction and global availability of the Shockwave M5+ peripheral IVL catheter, post the receipt of the CE mark and the FDA clearance last year.
What’s the Downside?
Limited commercialization expertise and approved or cleared products pose a challenge to Shockwave Medical in evaluating its current business and determining its future financial growth.
ShockWave Medical, Inc. Price
ShockWave Medical, Inc. price | ShockWave Medical, Inc. Quote
Estimate Trend
The Zacks Consensus Estimate for 2023 revenues is pegged at $671 million, indicating an improvement of 37% from the previous year’s reported figure. The same for adjusted earnings per share (EPS) stands at $3.91.
Key Picks
Some better-ranked stocks from the broader medical space are Alcon ALC, Avanos Medical AVNS and Embecta Corp. EMBC, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Alcon’s EPS has risen from $2.51 to $2.56 for 2023, in the past 30 days. ALC stock has lost 6.2% in the past six months. Alcon delivered an average earnings surprise of 12.37%, in the last four quarters.
Earnings estimates for Avanos Medical have improved from $1.64 to $1.68 for 2023, in the past 30 days. AVNS stock has risen 9.4% in the past six months. Avanos Medical delivered an average earnings surprise of 11.01%, in the last four quarters.
Earnings estimates for Embecta have increased from $1.90 per share to $2.33 for fiscal 2023, in the past 30 days. EMBC stock has declined 7.9% in the past six months. Embecta delivered an average earnings surprise of 38.86%, in the last four quarters.
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Alcon (ALC) : Free Stock Analysis Report
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ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
Embecta Corp. (EMBC) : Free Stock Analysis Report
