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Inari Medical (NARI) Gains 12.5% Despite In-Line Q4 Earnings

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Shares of Inari Medical, Inc. (NARI - Free Report) rose 12.5% on Feb 23, following the company's fourth-quarter 2021 results.

The company reported fourth-quarter 2021 adjusted earnings per share (EPS) of 2 cents, which came in line with the Zacks Consensus Estimate. The company had reported earnings of 13 cents per share in the year-ago quarter.

On a GAAP basis, net income per share was 2 cents per share, compared with the year-ago quarter’s figure of 14 cents.

For full-year 2021, the company reported an adjusted EPS of 18 cents, down 33.3% from the previous year.

Revenue Details

The company reported revenues of $83.2 million, which soared 71% from the prior-year quarter. The top line outpaced the Zacks Consensus Estimate by 12.4%.

In 2021, the company reported $277 million, up 98% from the previous year.

Q4 Highlights

The company treated 7,700 patients, up 15% on a sequential basis. In fact, non-COVID patients led to above 90% of overall procedures and sequential procedure growth in the quarter under review.

Inari Medical, Inc. Price, Consensus and EPS Surprise

Inari Medical, Inc. Price, Consensus and EPS Surprise

Inari Medical, Inc. price-consensus-eps-surprise-chart | Inari Medical, Inc. Quote

Inari Medical enrolled the first patient into its PEERLESS randomized controlled trial in pulmonary embolism (PE), while it enrolled the final patient into the U.S. arm of the FLASH PE registry. The company also enrolled the final patient with regard to the CLOUT deep vein thrombosis (DVT) registry.

The company ended 2021 with above 200 U.S. sales territories.

Margins

Gross profit in the reported quarter was $74.9 million, up 66.8% year over year. As a percentage of revenues, gross margin in the quarter was 90.1%, down 230 basis points (bps).

Research and development expenses were $18.7 million, up 186.5% from the year-ago quarter. Meanwhile, selling, general and administrative expenses amounted to $54.5 million, up 73.5% on a year-over-year basis.

Operating income amounted to $1.7 million compared with the year-ago quarter’s figure of $6.9 million. As a percentage of revenues, operating margin in the quarter was 2.1%, down 1230 basis bps.

Financial Position

The company exited the fourth quarter with cash, cash equivalents and short-term investments of $176.1 million, up from $162.6 million on a sequential basis.

Cumulative net cash provided by operating activities at the end of the fourth quarter was $25.5 million, compared with $1.9 million in the prior-year quarter.

2022 Revenue Outlook

For 2022, the company projects revenues to be $350-$360 million. The Zacks Consensus Estimate for the same is pegged at $358.2 million.

Our Take

Inari Medical exited the fourth quarter on a mixed note, wherein earnings came in line with the consensus mark, while revenues beat the same. Milestones achieved with respect to several clinical studies are encouraging. Apart from treating a large number of patients in the quarter under review, the company made substantial progress on all of its growth drivers.

However, the incurrence of operating loss remains a concern. Contraction in both gross and operating margins is a woe.

Zacks Rank

Currently, Inari Medical carries a Zacks Rank #4 (Sell).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks in the broader medical space that have announced quarterly results are Henry Schein, Inc. (HSIC - Free Report) , Quidel Corporation (QDEL - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .

Henry Schein, carrying a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2021 adjusted earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 18.9%. Revenues of $3.33 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.5%.

Quidel reported fourth-quarter 2021 adjusted EPS of $7.29, which surpassed the Zacks Consensus Estimate by 49.1%. Fourth-quarter revenues of $636.9 million outpaced the Zacks Consensus Estimate by 0.3%. It currently sports a Zacks Rank #1.

Quidel’s earnings yield of 8.4% compares favorably with the industry’s (0.7%). QDEL surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 129.4%.

Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Fourth-quarter revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2 (Buy).

Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in each of the trailing four quarters, the average surprise being 66.9%.