A month has gone by since the last earnings report for NuVasive . Shares have lost about 4.2% 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 drivers.
NuVasive Q2 Earnings Top Estimates, Margins Strong
NuVasive delivered second-quarter 2019 adjusted earnings per share (EPS) of 63 cents, reflecting an 8.6% rise from the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate by 12.5%. On a reported basis, EPS came in at 29 cents, highlighting a 31.8% improvement from the year-ago number.
Revenues in the second quarter came in at $292.1 million, up 3.7% on a reported basis (up 4.7% at constant exchange rate or CER) year over year. The top line also beat the Zacks Consensus Estimate by a nominal 0.1%.
Geographical & Segmental Details
In the quarter under review, revenues at the U.S. Spinal Hardware business increased 6.3% year over year to $160.2 million. The revenue upside was driven by solid uptick in case volume and tangible growth in both the XLIF and ALIF franchises, led by continued adoption of NuVasive's X360 system.
Revenues in the U.S. Surgical Support business were $73.9 million in the second quarter, with the growth rate remaining flat year over year. The upside was driven by 6% growth in NuVasive Clinical Services revenues.
Within the Biologics segment, there was a 1% decline in revenues from the year-ago quarter, even though the figure was in line with expectations.
In the second quarter, the company registered international revenues of $57.9 million, reflecting 6.6% year-over-year growth at CER. The EMEA region witnessed a solid uptick, driven by substantial contribution from Italy, Spain and the DACH region.This was offset by sluggish growth in Asia Pacific and Latin America.
Margin Details
In the reported quarter, gross profit improved 4.9% year over year to $214.5 million. Gross profit margin expanded 81 basis points (bps) to 73.4%. Adjusted operating profit rose 0.3% from the year-ago period to $44.1 million. Accordingly, adjusted operating margin contracted 52 bps to 15.1% in the quarter under review.
Operational Update
The company exited the second quarter of 2019 with cash and cash equivalents of $128.4 million, down from $491.7 million at the end of the first quarter. Year to date, net cash provided by operating activities totaled $93.4 million compared with $77.2 million a year ago.
Guidance for 2019
NuVasive reiterated its revenue outlook for 2019 at the range of $1.14-$1.16 billion. The Zacks Consensus Estimate for 2019 revenues is pegged at $1.15 billion, within the company’s guided range. However, the company raised its adjusted EPS for 2019 in the $2.25-2.35 range, compared to the earlier projection of $2.20 -2.30. The Zacks Consensus Estimate for this metric stands at $2.28, within the guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, NuVasive has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 has been net zero. Notably, NuVasive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Image: Bigstock
Why Is NuVasive (NUVA) Down 4.2% Since Last Earnings Report?
A month has gone by since the last earnings report for NuVasive . Shares have lost about 4.2% 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 drivers.
NuVasive Q2 Earnings Top Estimates, Margins Strong
NuVasive delivered second-quarter 2019 adjusted earnings per share (EPS) of 63 cents, reflecting an 8.6% rise from the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate by 12.5%. On a reported basis, EPS came in at 29 cents, highlighting a 31.8% improvement from the year-ago number.
Revenues in the second quarter came in at $292.1 million, up 3.7% on a reported basis (up 4.7% at constant exchange rate or CER) year over year. The top line also beat the Zacks Consensus Estimate by a nominal 0.1%.
Geographical & Segmental Details
In the quarter under review, revenues at the U.S. Spinal Hardware business increased 6.3% year over year to $160.2 million. The revenue upside was driven by solid uptick in case volume and tangible growth in both the XLIF and ALIF franchises, led by continued adoption of NuVasive's X360 system.
Revenues in the U.S. Surgical Support business were $73.9 million in the second quarter, with the growth rate remaining flat year over year. The upside was driven by 6% growth in NuVasive Clinical Services revenues.
Within the Biologics segment, there was a 1% decline in revenues from the year-ago quarter, even though the figure was in line with expectations.
In the second quarter, the company registered international revenues of $57.9 million, reflecting 6.6% year-over-year growth at CER. The EMEA region witnessed a solid uptick, driven by substantial contribution from Italy, Spain and the DACH region.This was offset by sluggish growth in Asia Pacific and Latin America.
Margin Details
In the reported quarter, gross profit improved 4.9% year over year to $214.5 million. Gross profit margin expanded 81 basis points (bps) to 73.4%. Adjusted operating profit rose 0.3% from the year-ago period to $44.1 million. Accordingly, adjusted operating margin contracted 52 bps to 15.1% in the quarter under review.
Operational Update
The company exited the second quarter of 2019 with cash and cash equivalents of $128.4 million, down from $491.7 million at the end of the first quarter. Year to date, net cash provided by operating activities totaled $93.4 million compared with $77.2 million a year ago.
Guidance for 2019
NuVasive reiterated its revenue outlook for 2019 at the range of $1.14-$1.16 billion. The Zacks Consensus Estimate for 2019 revenues is pegged at $1.15 billion, within the company’s guided range. However, the company raised its adjusted EPS for 2019 in the $2.25-2.35 range, compared to the earlier projection of $2.20 -2.30. The Zacks Consensus Estimate for this metric stands at $2.28, within the guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, NuVasive has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 has been net zero. Notably, NuVasive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.