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Why Is Nevro (NVRO) Down 1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Nevro (NVRO - Free Report) . Shares have lost about 1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nevro due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Nevro reported loss per share of 71 cents for the second quarter of 2022, wider than the loss of 62 cents reported in the year-ago quarter. Loss per share was narrower than the Zacks Consensus Estimate of a loss of 81 cents.
Revenues in Detail
Nevro registered revenues of $104.2 million in the second quarter, up 1.8% year over year on a reported basis. The figure, however, missed the Zacks Consensus Estimate by 0.4%.
At constant exchange rate (CER), revenues were up 4% year over year.
Worldwide revenues include approximately $11 million of PDN revenues.
Quarterly Highlights
In the quarter under review, international revenues were $15.2 million, down 12% year over year on a reported basis and 3% at CER. International revenues, especially in the UK and Australia, continued to be impacted by COVID-related issues throughout the quarter.
U.S. revenues for the quarter totaled $89 million, up 5% year over year. Total U.S. permanent implant procedures increased 8%, while U.S. trial procedures increased 14%.
U.S. PDN trial procedures grew by 45% sequentially.
Margin Trend
In the quarter under review, Nevro’s gross profit rose 3.9% to $72.7 million. Gross margin expanded 140 basis points (bps) to 69.8%.
Sales, general & administrative expenses rose 13.7% to $83.9 million. R&D expenses went up 5.8% year over year to $12.6 million. Total operating expenses of $96.5 million increased 12.6% year over year.
Operating loss in the reported quarter totaled $23.8 million compared with total operating loss of $15.8 million in the year-ago quarter.
Financial Position
Nevro exited second-quarter 2022 with cash and cash equivalents, and short-term investments of $310.8 million compared with $323.6 million at the end of first quarter. Long-term debt at the end of second-quarter 2022 was $186.3 million compared with $185.9 million at the end of first quarter.
As of Jun 30, 2022, 290,000,000 shares were authorized, 36,063,723 shares issued and 35,380,807 shares were outstanding.
Guidance
Nevro issued its financial outlook for the third quarter of 2022 and revised the same for the full year.
The company projects third-quarter 2022 worldwide revenues in the range of $97 million-$101 million, reflecting growth of 4-8% over the prior-year period.
The third-quarter outlook assumes that economic recovery will continue to steadily improve in the quarter.
Nevro now expects its full-year 2022 worldwide revenues to be in the range of $400 million-$410 million (reflecting growth of 3-6% from the comparable reported figure of 2021), lowered from the earlier projections of $415-$430 million (reflecting a 7-11% increase from the 2021 reported figure). The Zacks Consensus Estimate for the same is pegged at $423.2 million.
Full-year revenue growth at CER is likely to be 7-12% over comparable 2021 figures, wider than the previous growth projection of 8-12%.
Full-year 2022 worldwide revenue guidance includes approximately $42 million-$45 million of PDN revenues, up from the previous projection of $27-$32 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -10.2% due to these changes.
VGM Scores
Currently, Nevro has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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, Nevro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Nevro (NVRO) Down 1% Since Last Earnings Report?
It has been about a month since the last earnings report for Nevro (NVRO - Free Report) . Shares have lost about 1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nevro due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Nevro Q2 Earnings Beat Estimates, FY22 View Revised
Nevro reported loss per share of 71 cents for the second quarter of 2022, wider than the loss of 62 cents reported in the year-ago quarter. Loss per share was narrower than the Zacks Consensus Estimate of a loss of 81 cents.
Revenues in Detail
Nevro registered revenues of $104.2 million in the second quarter, up 1.8% year over year on a reported basis. The figure, however, missed the Zacks Consensus Estimate by 0.4%.
At constant exchange rate (CER), revenues were up 4% year over year.
Worldwide revenues include approximately $11 million of PDN revenues.
Quarterly Highlights
In the quarter under review, international revenues were $15.2 million, down 12% year over year on a reported basis and 3% at CER. International revenues, especially in the UK and Australia, continued to be impacted by COVID-related issues throughout the quarter.
U.S. revenues for the quarter totaled $89 million, up 5% year over year. Total U.S. permanent implant procedures increased 8%, while U.S. trial procedures increased 14%.
U.S. PDN trial procedures grew by 45% sequentially.
Margin Trend
In the quarter under review, Nevro’s gross profit rose 3.9% to $72.7 million. Gross margin expanded 140 basis points (bps) to 69.8%.
Sales, general & administrative expenses rose 13.7% to $83.9 million. R&D expenses went up 5.8% year over year to $12.6 million. Total operating expenses of $96.5 million increased 12.6% year over year.
Operating loss in the reported quarter totaled $23.8 million compared with total operating loss of $15.8 million in the year-ago quarter.
Financial Position
Nevro exited second-quarter 2022 with cash and cash equivalents, and short-term investments of $310.8 million compared with $323.6 million at the end of first quarter. Long-term debt at the end of second-quarter 2022 was $186.3 million compared with $185.9 million at the end of first quarter.
As of Jun 30, 2022, 290,000,000 shares were authorized, 36,063,723 shares issued and 35,380,807 shares were outstanding.
Guidance
Nevro issued its financial outlook for the third quarter of 2022 and revised the same for the full year.
The company projects third-quarter 2022 worldwide revenues in the range of $97 million-$101 million, reflecting growth of 4-8% over the prior-year period.
The third-quarter outlook assumes that economic recovery will continue to steadily improve in the quarter.
Nevro now expects its full-year 2022 worldwide revenues to be in the range of $400 million-$410 million (reflecting growth of 3-6% from the comparable reported figure of 2021), lowered from the earlier projections of $415-$430 million (reflecting a 7-11% increase from the 2021 reported figure). The Zacks Consensus Estimate for the same is pegged at $423.2 million.
Full-year revenue growth at CER is likely to be 7-12% over comparable 2021 figures, wider than the previous growth projection of 8-12%.
Full-year 2022 worldwide revenue guidance includes approximately $42 million-$45 million of PDN revenues, up from the previous projection of $27-$32 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -10.2% due to these changes.
VGM Scores
Currently, Nevro has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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, Nevro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.