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AngioDynamics (ANGO) at a 52-Week High: What's Driving It?

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Shares of AngioDynamics Inc. (ANGO - Free Report) reached a new 52-week high of $22.71 on Mar 9, before closing the session marginally lower at $ 21.77. The stock has rallied 34.5% since its second-quarter earnings announcement on Jan 7.

The company is witnessing an uptrend in its stock price, prompted by robust performance in the Vascular Interventions and Therapies and the Vascular Access businesses during the second quarter. AngioDynamics is witnessing continued strong momentum from its Auryon Atherectomy System launch. The NanoKnife platform continues to be a major plus. However, the company is exposed to stringent regulatory environment and pricing headwinds due to stiff competition.

Let’s delve deeper

Key Growth Catalysts

Impressive Q2 Performance: AngioDynamics’ strong performance in the second quarter buoys optimism.  The company witnessed solid technology platform performance with strong sales growth in the AngioVac arm. The recent launch of Auryon Atherectomy System contributed to growth. Vascular Interventions and Therapies and the Vascular Access segments revenues rose during the reported quarter. Reaffirmation of its fiscal 2021 outlook instills investor optimism.

Growth in NanoKnife: AngioDynamics continues to witness strong momentum in its NanoKnife platform with robust disposable sales in the second quarter of fiscal 2021 on strong capital sales in fiscal 2020 as well as increased visibility of this technology’s uniqueness.  Moreover, NanoKnife probe sales grew 30% in the reported quarter driven by 76% growth in the United States. Considering solid performance of the Nanoknife platform, AngioDynamics recently launched the NanoKnife 3.0 generator.

Positive Long-Term Outlook: The bullish stock trend reflects a positive long-term outlook, an expanding product portfolio, an innovative pipeline and improving operating efficiency. AngioDynamics continues to focus on investments in its three key technologies – AngioVac, Auryon and NanoKnife – which will enhance its market opportunities. The company expects to boost its portfolio with a strong pipeline, which includes AngioVac 4.0. along with double and triple lumen catheters to be used for dialysis. Additionally, a dual-source group purchasing agreement with Premier to supply implantable infusion ports buoys optimism.

AngioDynamics is riding on acquisitions and strategic alliances like Microsulis, Navilyst, Vortex Medical, NanoKnife and RITA Medical. The recent acquisition of C3 Wave PICC tip location system is expected to positively impact PICC product lines over the long run.

Downsides

Stringent Regulatory Environment: AngioDynamics is exposed to a stringent regulatory environment. Regulatory setbacks might dampen approvals for pipeline products, which will in turn hurt overall growth. The company is also facing regulatory delays in its Asian markets, which is a concern.

Pricing Headwinds & Competition: AngioDynamics is exposed to pricing headwinds stemming from lower selling prices of peripheral vascular products due to aggressive price competition. The company faces stiff competition from device makers like Boston Scientific, Becton, Dickinson & Company and Merit Medical.

Zacks Rank and Key Picks

Currently, AngioDynamics carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the broader medical space are Bioanalytical Systems, Inc. , ConforMIS, Inc. and Hologic, Inc. (HOLX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

Bioanalytical Systems has a projected long-term earnings growth rate of 15%.

ConforMIS has an estimated long-term earnings growth rate of 42%.

Hologic has a projected long-term earnings growth rate of 15%.

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