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Shockwave Medical (SWAV) Gains 0.6% Post Q3 Earnings Beat

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  • SWAV
  • TMO
  • WST
  • ANGO

Shares of Shockwave Medical, Inc. SWAV rose 0.6% on Nov 10, following the company's third-quarter 2021 results.

The company reported third-quarter 2021 adjusted earnings per share (EPS) of 5 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. The company had reported a loss of 38 cents in the year-ago quarter.

GAAP EPS in the quarter was 6 cents, against the year-ago quarter’s loss of 38 cents.

Revenue Details

The company reported revenues of $65.2 billion, which shot up 233% from the prior-year quarter. The top line outpaced the Zacks Consensus Estimate by 5.1%.

Sustained recovery from the impact of the pandemic, higher adoption of Shockwave products and introduction of the coronary product — Shockwave C2 — in the United States in February, contributed to the improvement.

Q3 Highlights

Interestingly, DISRUPT PAD III observational study results of peripheral IVL were featured as a late breaking presentation at the VIVA21 conference.

Apart from this, first one-year results, which is a new gender analysis and an OCT analysis from the Disrupt CAD coronary IVL clinical program, were presented in several sessions at the 32nd Transcatheter Cardiovascular Therapeutics (TCT) annual scientific symposium.

ShockWave Medical, Inc. Price, Consensus and EPS Surprise

ShockWave Medical, Inc. Price, Consensus and EPS Surprise
ShockWave Medical, Inc. Price, Consensus and EPS Surprise

ShockWave Medical, Inc. price-consensus-eps-surprise-chart | ShockWave Medical, Inc. Quote

Further, Centers for Medicare & Medicaid Services (CMS) increased payment for above the knee peripheral IVL procedures as part of the calendar year 2022 Medicare Hospital Outpatient Prospective Payment System (OPPS) final rule.

Margins

Gross profit in the reported quarter was $54.2 million, up 278.7% year over year. As a percentage of revenues, gross margin in the quarter was 83%, up 1000 basis points (bps).

Selling and marketing expenses amounted to $28.4 million, up 108.5% from the prior-year quarter. Research and development expenses totaled $13.7 million, up 74.1% on a year-over-year basis.

Operating income totaled $2.8 million, against the year-ago quarter’s operating loss of $12.8 million.

Financial Position

The company exited the third quarter with cash, cash equivalents and investments of $91.2 million, compared with $84.3 million in the previous quarter.

Cumulative net cash used in operating activities at the end of the third quarter totaled $5.8 million, compared with net cash used in the prior-year period of $58.8 million.

2021 Revenue Outlook Raised

For 2021, Shockwave Medical expects revenues to be $227-$228 million (up from the previously guided range of $218-$223 million), reflecting growth of 235-236% over the prior year period. The Zacks Consensus Estimate is currently pegged at $224.2 million.

Wrapping Up

Shockwave Medical ended the third quarter on a strong note, wherein both earnings and revenues beat the consensus mark. The company exhibited significant revenue growth in the third quarter. Expansion in gross margin is encouraging.

Management is optimistic about the continued clinical acceptance and penetration of Intravascular Lithotripsy (IVL) as demonstrated by its strong results in the quarter under review driven by the increasing adoption of coronary IVL in the United States.

However, an increase in operating expenses remains a concern.

Zacks Rank

Currently, Shockwave Medical carries a Zacks Rank #4 (Sell).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific Inc. TMO, West Pharmaceutical Services, Inc. WST, and AngioDynamics, Inc. ANGO.

Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which beat the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the consensus mark by 12%. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2021, the consensus mark for earnings is currently pegged at $23.40 per share, indicating an improvement of 19.7% from the previous year. The same for revenues stands at $37.13 billion, suggesting growth of 15.3% from the year-ago reported figure. Thermo Fisher’s long-term earnings growth rate is projected at 14%.

West Pharmaceutical reported third-quarter 2021 adjusted EPS of $2.06, which surpassed the Zacks Consensus Estimate by 13.2%. Third-quarter revenues of $706.5 million outpaced the Zacks Consensus Estimate by 3.2%. The company carries a Zacks Rank of 2 (Buy).

For 2021, the consensus mark for earnings is currently pegged at $8.43 per share, indicating an increase of 77.1% from the previous year. The same for revenues stands at $2.81 billion, suggesting growth of 30.9% from the year-ago reported figure. West Pharmaceutical’s long-term earnings growth rate is projected at 27.6%.

AngioDynamics reported first-quarter fiscal 2022 loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a loss of 5 cents. Revenues of $76.9 million surpassed the Zacks Consensus Estimate by 8.4%. Presently, the company carries a Zacks Rank #2.

For fiscal 2022, the Zacks Consensus Estimate for earnings is currently pegged at 2 cents per share, reflecting a decline of 60% from the previous year. The same for revenues stands at $313.3 million, suggesting growth of 7.7% from the year-ago reported figure. AngioDynamics’ earnings yield of 0.1% compares favorably with the industry’s (2.8%).


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