A month has gone by since the last earnings report for NuVasive . Shares have lost about 16.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NuVasive due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NuVasive Q2 Earnings Miss Estimates, Revenues Beat
NuVasive delivered adjusted earnings per share of 47 cents in second-quarter 2022, down 21.7% from the year-ago quarter’s adjusted earnings per share of 60 cents. The figure also missed the Zacks Consensus Estimate by 14.6%.
The one-time adjustments include expenses associated with certain business transition costs and amortization expenses, among others.
GAAP loss per share of 2 cents compares with the year-ago earnings per share of 3 cents.
Total Revenues
Revenues in the second quarter totaled $310.5 million, up 5.3% year over year on a reported basis and up 7.8% at the constant exchange rate or CER. The top line beat the Zacks Consensus Estimate by 1.5%.
Second-quarter revenue growth was driven by continued positive momentum from new products, including the Simplify Cervical Disc and the Pulse platform, higher procedure volume in the United States and robust international performance.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 3.1% year over year to $165.1million on continued growth in the X360 and C360 portfolios.
Revenues from the U.S. Surgical Support business were $71.8million in the second quarter, up 6.2% year over year, led by strong sales of the Pulse platform. However, this growth was offset by a decline in biologics driven by a shift incase mix and lower attachment rates.
In the quarter, the company’s international business delivered a strong performance, exhibiting double-digit growth on a constant currency basis across Europe and Latin America. Within the Asia Pacific region, growth was led by Japan amid acute COVID-19 challenges.
Margin Details
In the reported quarter, gross profit rose 3.8% year over year to $224.7 million. The gross margin contracted 107 basis points (bps) to 72.4%.
Selling, general and administrative expenses rose 2.1% year over year to $160.7 million, whereas research and development (R&D) expenses climbed 19.1% year over year to $25.9 million.
Overall adjusted operating profit was $38.1 million, up 1.9% from the year-ago figure. Adjusted operating margin saw a 41-bp contraction year over year to 12.3%.
Financial Details
The company exited the second quarter of 2022 with cash and cash equivalents of $225.9 million compared with $205.3 million at the end of the first quarter of 2022.
Cumulative net cash provided by operating activities at the end of the quarter was $68.1 million compared with the prior-year period’s $79.4 million.
2022 Guidance
NuVasive has updated its financial outlook for full-year 2022.
The company continues to expect revenue growth in the range of 6-8% on a reported basis and 8.7-10.7% at CER (up from the prior projection of 7.5-9.5%). The Zacks Consensus Estimate for revenues is pegged at $1.22 billion.
The company reaffirmed its adjusted EPS guidance in the band of $2.15-$2.45. The Zacks Consensus Estimate for the same is pegged at $2.23.
The company has also maintained its adjusted operating margin guidance in the range of 13.0-14.5%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, NuVasive has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, NuVasive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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NuVasive (NUVA) Down 16.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for NuVasive . Shares have lost about 16.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NuVasive due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NuVasive Q2 Earnings Miss Estimates, Revenues Beat
NuVasive delivered adjusted earnings per share of 47 cents in second-quarter 2022, down 21.7% from the year-ago quarter’s adjusted earnings per share of 60 cents. The figure also missed the Zacks Consensus Estimate by 14.6%.
The one-time adjustments include expenses associated with certain business transition costs and amortization expenses, among others.
GAAP loss per share of 2 cents compares with the year-ago earnings per share of 3 cents.
Total Revenues
Revenues in the second quarter totaled $310.5 million, up 5.3% year over year on a reported basis and up 7.8% at the constant exchange rate or CER. The top line beat the Zacks Consensus Estimate by 1.5%.
Second-quarter revenue growth was driven by continued positive momentum from new products, including the Simplify Cervical Disc and the Pulse platform, higher procedure volume in the United States and robust international performance.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 3.1% year over year to $165.1million on continued growth in the X360 and C360 portfolios.
Revenues from the U.S. Surgical Support business were $71.8million in the second quarter, up 6.2% year over year, led by strong sales of the Pulse platform. However, this growth was offset by a decline in biologics driven by a shift incase mix and lower attachment rates.
In the quarter, the company’s international business delivered a strong performance, exhibiting double-digit growth on a constant currency basis across Europe and Latin America. Within the Asia Pacific region, growth was led by Japan amid acute COVID-19 challenges.
Margin Details
In the reported quarter, gross profit rose 3.8% year over year to $224.7 million. The gross margin contracted 107 basis points (bps) to 72.4%.
Selling, general and administrative expenses rose 2.1% year over year to $160.7 million, whereas research and development (R&D) expenses climbed 19.1% year over year to $25.9 million.
Overall adjusted operating profit was $38.1 million, up 1.9% from the year-ago figure. Adjusted operating margin saw a 41-bp contraction year over year to 12.3%.
Financial Details
The company exited the second quarter of 2022 with cash and cash equivalents of $225.9 million compared with $205.3 million at the end of the first quarter of 2022.
Cumulative net cash provided by operating activities at the end of the quarter was $68.1 million compared with the prior-year period’s $79.4 million.
2022 Guidance
NuVasive has updated its financial outlook for full-year 2022.
The company continues to expect revenue growth in the range of 6-8% on a reported basis and 8.7-10.7% at CER (up from the prior projection of 7.5-9.5%). The Zacks Consensus Estimate for revenues is pegged at $1.22 billion.
The company reaffirmed its adjusted EPS guidance in the band of $2.15-$2.45. The Zacks Consensus Estimate for the same is pegged at $2.23.
The company has also maintained its adjusted operating margin guidance in the range of 13.0-14.5%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, NuVasive has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, NuVasive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.