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Why Is Nevro (NVRO) Up 1.7% Since Last Earnings Report?

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A month has gone by since the last earnings report for Nevro (NVRO - Free Report) . Shares have added about 1.7% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Nevro due for a pullback? 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 Q3 Loss Narrower than Expected, Revenues Beat

Nevro Corp reported loss per share of 29 cents, narrower than the Zacks Consensus Estimate of a loss of 59 cents. The company had incurred loss per share of 58 cents in the year-ago quarter.

Revenues of $108.5 million surpassed the Zacks Consensus Estimate by 4.2%. The figure also grew 8.3% year over year.

Quarter Highlights

In the quarter under review, international revenues were $17.5 million, up 10% year over year on a reported basis and 5% at constant currency. A successful Omnia unveiling, higher patient and customer activity, and rebound in customer inventory levels (on a sequential basis) contributed to the improvement.

U.S. revenues for the quarter totaled $90.9 million, up 35% year over year. Per management, this upside was driven by an increase in patient and customer activity, especially growth in the number of U.S. permanent implants.

Margins

Gross profit totaled $76.1 million, up 8.8% year over year. Gross margin was 70.1%, up 32 basis points (bps).

Total operating expenses fell 7.3% year over year to $79.6 million.

Loss from operations was $3.5 million, narrower than the year-ago quarter’s loss of $15.9 million.

Guidance

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

Cash Position

The company exited the third quarter with cash and cash equivalents of $118.6 million, compared with $276.5 million at the end of the second quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 14.64% due to these changes.

VGM Scores

At this time, Nevro has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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 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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