Shockwave Medical (SWAV) Q2 Earnings Miss, Revenues Surge Y/Y
Shockwave Medical, Inc. SWAV reported second-quarter 2023 earnings per share (EPS) of 76 cents, which missed the Zacks Consensus Estimate of 87 cents by 12.6%. The company reported an EPS of 68 cents in the year-ago quarter.
Revenue Details
Revenues totaled $180.2 million for the quarter, up a massive 49% from the prior-year period’s level. The top line also beat the Zacks Consensus Estimate by 4%.
Management stated that the strong growth in top line was driven by double-digit growth in the U.S. coronary, U.S. peripheral and International markets. Key revenue drivers include strong uptake of M5+ catheter, addition of new accounts and appropriate reimbursement. While U.S. revenues were up 45%, International revenues grew 70% year over year.
Internationally, SWAV’s sales were boosted by strong momentum in Germany and Japan, and robust contribution from China.
Q2 Highlights
During the quarter, Shockwave Medical announced the full commercial launch of its C2+ Coronary Intravascular Lithotripsy (IVL) Catheter. The device, which is approved for treating patients with severely calcified coronary artery disease, will be available in select international markets. The company completed the acquisition of Neovasc Inc in April. The buyout added the latter’s Reducer System to SWAV’s portfolio of products. It also generated revenues of $1.2 million during the second quarter in international markets.
Margins
Gross profit in the reported quarter was $155.7 million, up 49.7% year over year. As a percentage of revenues, the gross margin in the quarter was 86%, flat year over year.
Sales and marketing expenses amounted to $56.7 million, up 40% from the prior-year quarter’s level. Research and development expenses totaled $32.4 million, up 77.4% on a year-over-year basis.
Operating income totaled $39.8 million compared with the year-ago quarter’s level of $29.6 million.
Financial Position
Shockwave Medical exited the second quarter with cash, cash equivalents and investments of $258.6 million compared with $416.9 million in the previous quarter.
Total assets amounted to $786.6 million compared with $783.2 million at the end of the first quarter of 2022.
2023 Revenue Outlook
For 2023, Shockwave Medical now expects revenues in the band of $725-$730 million compared with the previous guided range of $700-$720 million. The revised projected top line implies growth of 48-49% from the prior-year period’s level. The Zacks Consensus Estimate for the same is pegged at $717.7 million.
Wrapping Up
SWAV ended the second quarter on a mixed note, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. The company exhibited significant revenue growth in the same quarter. Strong top-line growth across all categories is also encouraging.
Management is optimistic about the continued clinical acceptance and penetration of IVL. This is due to the technology’s strong results in the quarter under review as well as a higher outlook for 2023 revenues.
However, an increase in operating expenses is a concern.
ShockWave Medical, Inc. Price, Consensus and EPS Surprise
ShockWave Medical, Inc. price-consensus-eps-surprise-chart | ShockWave Medical, Inc. Quote
Zacks Rank and Other Key Picks
Currently, Shockwave Medical carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Inari Medical NARI, Stryker SYK and Intuitive Surgical, Inc. ISRG.
Inari Medical, carrying a Zacks Rank of 2 at present, reported second-quarter 2023 adjusted EPS of 4 cents, which beat the Zacks Consensus Estimate by 128.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Revenues of $119 million outpaced the consensus mark by 2.3%.
Inari Medical has an estimated growth rate of 16.8% for revenues in 2024. NARI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 66.8%.
Stryker reported second-quarter 2023 adjusted EPS of $2.54, which beat the Zacks Consensus Estimate by 6.7%. Revenues of $4.99 billion surpassed the consensus estimate by 3.4%. The company currently carries a Zacks Rank #2.
SYK has a long-term estimated growth rate of 9.9%. Its earnings surpassed estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 3.5%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, which beat the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the consensus mark by 1.4%. The company currently carries a Zacks Rank #2.
ISRG has a long-term estimated growth rate of 14.5%. Its earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 4.2%.
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