Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We have reaffirmed our Neutral recommendation on Volcano Corporation (VOLC - Analyst Report) based on the company’s disappointing third quarter 2012 and a sluggish prelim result for the fourth quarter that was released on January 7. The stock currently carries a Zacks Rank #4 (Sell). However, strong pipeline development and encouraging growth trend are expected to offset the near-term challenges.

Why Maintained at Neutral?

Volcano Corporation’s third-quarter performance was mixed as earnings per share (EPS) were in line with the Zacks Consensus Estimate, while revenues missed the mark. Several challenges including a weak domestic PCI market, transition to a direct sales model in Spain, bi-annual price cuts in Japan and pressure on margin, which are currently at play, forced the company to lower its 2012 outlook. Adding to our worries, recently, the company released its preliminary fourth quarter result with expected revenues of $102.5 million, which once again fell short of the Zacks Consensus Estimate ($106 million).

However, in spite of all, the expected fiscal revenues of $381.9 million were up 11% year over year (up 12% at CER), marginally ahead of the Zacks Consensus Estimate of $380 million and within the company’s guided range of $380–$384 million. We are also encouraged with the company’s pipeline development, with many products, slated for release over the next few quarters. We also believe that favorable industry trends should aid growth of the company. At present, clinicians and hospitals are facing increasing pressure to justify the medical necessity of PCI therapy.

Over the past 60 days, none of the 15 firms covering the stock made any estimate revisions for the current fiscal, implying that they still hold a similar view on the stock.

Other Stocks to Consider

While we prefer to remain on the sidelines on Volcano Corporation, other medical device stocks worth a look are Haemonetics Corporation (HAE - Analyst Report) and Nxstage Medical Inc. (NXTM - Snapshot Report). Both the stocks carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%