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Penumbra (PEN) Q4 Loss Narrower than Expected, Sales Top
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Penumbra, Inc. (PEN - Free Report) , that went public in Sep 2015, reported fourth-quarter 2016 loss of 8 cents per share, down from earnings of 5 cents per share year over year. However, the figure was way narrower than the Zacks Consensus Estimate loss of 12 cents.
Full-year 2016 earnings per share were 44 cents, with a stupendous rise of 450% from the prior year. The figure is higher than the Zacks Consensus Estimate of a loss of 12 cents.
Revenues in Details
Revenues in the reported quarter surged 34.3% year over year (up 33.9% at constant exchange rate or CER) to $73.1 million, steering past the Zacks Consensus Estimate of $68 million by 7.5%.
For full-year 2016, Penumbra’s total revenue rose 41.5% from the year-ago period to $263.3 million, which is ahead of the Zacks Consensus Estimate figure of $257.9 million.
On a geographic basis, fourth quarter revenues in the U.S. (representing 66.5% of total sales) grossed $48.6 million, up 28.1% from the year-ago quarter figure, while International sales (33.5% of total sales) jumped 48.7% year over year (up 33.9% at CER) to $24.5 million.
Going by product category, revenues from neuro products grew 31.5% (or up 30.7% at CER) to $51.4 million in the fourth quarter of 2016. Revenues from peripheral vascular product business rose to $21.8 million in the fourth quarter, reflecting an increase of 41.5% (or up 41.9% at CER) year over year.
Moreover, in the fourth quarter both Penumbra’s neuro and peripheral vascular businesses saw robust growth driven by several important products and geographic launches.
Neuro sales were primarily driven by sales of its ACE68 reperfusion catheter, which is part of Penumbra System for ischemic stroke. In fact, the company had launched ACE68 in Europe in the quarter, following its U.S. introduction in the third quarter. Additionally, Neuro’s growth was driven by sales of SMART Coil, which is part of the company’s neuro embolization products for the treatment of brain aneurysms.
Operational Update
Penumbra’s fourth-quarter gross margin was 63.7%, reflecting a 328 basis points (bps) contraction year over year, on account of a 27.7% rise in gross profit.
Research and development expenses totaled $6.1 million, up 11.5%, while sales, general and administrative expenses amounted to $41.6 million, up 42.7% year over year. Both the increases were primarily driven by a rise in personnel-related expenses, resulting from increased headcount to support continued investment in products, as well as increases in product development, testing and trial expenses.
Furthermore, loss from operations came in at $1.2 million, which is a huge decline from the operating income of $1.8 million in the prior-year quarter. The company’s operating margin also declined 1.5%, reflecting a huge contraction of 492 bps.
Financial Update
Penumbra exited the fiscal 2016 with cash and cash equivalents of $13.2 million, down from $19.5 million recorded in the prior year.
2017 Outlook
Penumbra expects total revenue for 2017 to be in the range of $312 to $317 million, which represents revenue growth of almost 20% over full-year 2016. Moreover, the Zacks Consensus Estimate for revenue is $316.1 million, which is within the guided range.
Our Take
Penumbra exited fourth-quarter 2016 on a solid note, with the company reporting impressive top and bottom-line results, both beating the Zacks Consensus Estimate. Although, year-over-year comparison of earnings was unfavorable in the quarter under review, the company witnessed strong growth across all its geographies and product line. However, escalating costs and expenses exerted pressure on margins.
Penumbra is an active player in the fast-growing interventional therapies space. In fact, the company’s products primarily cater to the unmet clinical needs across two major markets – neuro and peripheral vascular.
In fact, rising demand for treatment options in the heart diseases market reflects the high-growth potential in this niche. Also, attractive growth opportunities exist for Penumbra in the ischemic stroke market as well as in the more established markets like hemorrhagic stroke and peripheral vascular. Accordingly, Penumbra’s strategy is to focus on product development and innovation, which raises investors’ confidence in the stock.
Zacks Rank & Key Picks
Penumbra currently has a Zacks Rank #3 (Hold). Better-ranked medical stocks are Glaukos Corporation (GKOS - Free Report) , Cardiovascular Systems and Neogen Corp. (NEOG - Free Report) . While Glaukos sports a Zacks Rank #1 (Strong Buy), Cardiovascular Systems and Neogen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos gained over 100% in the last one year in comparison with the S&P 500’s gain of 18.9%. Also, the company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 26.4% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared to the industry average of 15.2%.
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Penumbra (PEN) Q4 Loss Narrower than Expected, Sales Top
Penumbra, Inc. (PEN - Free Report) , that went public in Sep 2015, reported fourth-quarter 2016 loss of 8 cents per share, down from earnings of 5 cents per share year over year. However, the figure was way narrower than the Zacks Consensus Estimate loss of 12 cents.
Full-year 2016 earnings per share were 44 cents, with a stupendous rise of 450% from the prior year. The figure is higher than the Zacks Consensus Estimate of a loss of 12 cents.
Revenues in Details
Revenues in the reported quarter surged 34.3% year over year (up 33.9% at constant exchange rate or CER) to $73.1 million, steering past the Zacks Consensus Estimate of $68 million by 7.5%.
Penumbra, Inc. Price, Consensus and EPS Surprise
Penumbra, Inc. Price, Consensus and EPS Surprise | Penumbra, Inc. Quote
For full-year 2016, Penumbra’s total revenue rose 41.5% from the year-ago period to $263.3 million, which is ahead of the Zacks Consensus Estimate figure of $257.9 million.
On a geographic basis, fourth quarter revenues in the U.S. (representing 66.5% of total sales) grossed $48.6 million, up 28.1% from the year-ago quarter figure, while International sales (33.5% of total sales) jumped 48.7% year over year (up 33.9% at CER) to $24.5 million.
Going by product category, revenues from neuro products grew 31.5% (or up 30.7% at CER) to $51.4 million in the fourth quarter of 2016. Revenues from peripheral vascular product business rose to $21.8 million in the fourth quarter, reflecting an increase of 41.5% (or up 41.9% at CER) year over year.
Moreover, in the fourth quarter both Penumbra’s neuro and peripheral vascular businesses saw robust growth driven by several important products and geographic launches.
Neuro sales were primarily driven by sales of its ACE68 reperfusion catheter, which is part of Penumbra System for ischemic stroke. In fact, the company had launched ACE68 in Europe in the quarter, following its U.S. introduction in the third quarter. Additionally, Neuro’s growth was driven by sales of SMART Coil, which is part of the company’s neuro embolization products for the treatment of brain aneurysms.
Operational Update
Penumbra’s fourth-quarter gross margin was 63.7%, reflecting a 328 basis points (bps) contraction year over year, on account of a 27.7% rise in gross profit.
Research and development expenses totaled $6.1 million, up 11.5%, while sales, general and administrative expenses amounted to $41.6 million, up 42.7% year over year. Both the increases were primarily driven by a rise in personnel-related expenses, resulting from increased headcount to support continued investment in products, as well as increases in product development, testing and trial expenses.
Furthermore, loss from operations came in at $1.2 million, which is a huge decline from the operating income of $1.8 million in the prior-year quarter. The company’s operating margin also declined 1.5%, reflecting a huge contraction of 492 bps.
Financial Update
Penumbra exited the fiscal 2016 with cash and cash equivalents of $13.2 million, down from $19.5 million recorded in the prior year.
2017 Outlook
Penumbra expects total revenue for 2017 to be in the range of $312 to $317 million, which represents revenue growth of almost 20% over full-year 2016. Moreover, the Zacks Consensus Estimate for revenue is $316.1 million, which is within the guided range.
Our Take
Penumbra exited fourth-quarter 2016 on a solid note, with the company reporting impressive top and bottom-line results, both beating the Zacks Consensus Estimate. Although, year-over-year comparison of earnings was unfavorable in the quarter under review, the company witnessed strong growth across all its geographies and product line. However, escalating costs and expenses exerted pressure on margins.
Penumbra is an active player in the fast-growing interventional therapies space. In fact, the company’s products primarily cater to the unmet clinical needs across two major markets – neuro and peripheral vascular.
In fact, rising demand for treatment options in the heart diseases market reflects the high-growth potential in this niche. Also, attractive growth opportunities exist for Penumbra in the ischemic stroke market as well as in the more established markets like hemorrhagic stroke and peripheral vascular. Accordingly, Penumbra’s strategy is to focus on product development and innovation, which raises investors’ confidence in the stock.
Zacks Rank & Key Picks
Penumbra currently has a Zacks Rank #3 (Hold). Better-ranked medical stocks are Glaukos Corporation (GKOS - Free Report) , Cardiovascular Systems and Neogen Corp. (NEOG - Free Report) . While Glaukos sports a Zacks Rank #1 (Strong Buy), Cardiovascular Systems and Neogen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos gained over 100% in the last one year in comparison with the S&P 500’s gain of 18.9%. Also, the company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 26.4% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared to the industry average of 15.2%.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>