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Nevro (NVRO) Down 2.3% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Nevro (NVRO - Free Report) . Shares have lost about 2.3% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.

Nevro Q2 Loss Narrower than Expected, Revenues Beat

Nevro Corp reported second-quarter 2020 loss of $1.21 per share, narrower than the Zacks Consensus Estimate of a loss of $1.65. The company had incurred a loss per share of 91 cents in the year-ago quarter.

Revenues of $56.4 million surpassed the Zacks Consensus Estimate by 36%. The figure however fell 39.7% year over year owing to the impact of COVID-19-related government restrictions on elective procedures implemented globally.

Quarter Highlights

In the quarter under review, international revenues were $5.4 million, down 65% year over year at constant currency.

U.S. revenues for the quarter totaled $51 million, down 35% year over year. Per management, this downside was due to decline in U.S. trials of about 37% and drop in permanent implants of around 34% during the second quarter due to the pandemic.

Margins

Gross profit totaled $35.3 million, down 44.9% year over year. Gross margin was 62.5%, down 583 basis points.

Total operating expenses fell 21.9% year over year to $70.6 million.

Loss from operations was $35.4 million, wider than the year-ago quarter’s loss of $26.6 million.

Guidance

Due to the continued economic uncertainties resulting from COVID-19, Nevro has not issued any guidance for 2020.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 37.18% due to these changes.

VGM Scores

Currently, Nevro has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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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