Cardiovascular Systems, Inc. has been incurring net losses for a long period of time, which is concerning. Tough competition and anticipated failure to grow business overseas continue to pose threats to this stock. The stock currently has a Zacks Rank #4 (Sell).

Over the past year, Cardiovascular Systems has underperformed the industry. The stock has declined 53.8% compared with the industry’s 18.1% fall.

Cardiovascular Systems’ last-reported second-quarter fiscal 2022 loss per share was much wider than the year-ago figure and the Zacks Consensus Mark. Peripheral revenues declined significantly in the quarter, both domestically and internationally. Meanwhile, coronary revenues fell 7% year over year in the United States. The company’s domestic business was impacted by lower procedure volumes due to hospital capacity issues and staffing shortages induced by the recent COVID-19 resurgence.

Cardiovascular Systems noted that the recovery from the Delta variant was suppressed by the emergence of the highly contagious Omicron variant. Per the company, the impact was more acutely felt in elective procedures like lower acuity peripheral claudication treatment. The company also lowered its 2022 outlook, raising apprehensions. The company anticipates its domestic revenues to decline sequentially in the fiscal third quarter.

Cardiovascular Systems, Inc. Price

Cardiovascular Systems, Inc. price | Cardiovascular Systems, Inc. Quote

On the profitability front, Cardiovascular Systems bears a long history of incurring net losses since its inception in 1989. Although it had generated a net profit of $1.7 million in fiscal 2018, sustainability of the same is a matter of question. In fiscal 2021, the company reported net loss of $13.4 million. In fiscal 2020 and 2019, the company reported net losses of $27.2 million and $0.3 million, respectively. In the second quarter of fiscal 2022, the situation remained unchanged with the company reporting 23 cents of net loss per share.

On a positive note, Cardiovascular Systems’ coronary franchise continued to put up a strong performance globally. On a sequential basis, worldwide coronary revenues grew 4% and increased slightly in the fiscal second quarter compared with the prior-year quarter. Outside the United States, coronary revenues rose 60% year over year, led by continued strength in Japan coupled with the launch of the coronary Orbital Atherectomy System (“OAS”) in Europe. During the fiscal second quarter, the company witnessed a rebound in the coronary business as cath labs resumed the use of atherectomy to treat lesions with intimal and medial calcium, heavy stenosis, and multivessel disease.

In the fiscal second quarter, the company sold $751 of support products for every coronary OAS sold. In the reported quarter, peripheral ISDs’ sales increased to $1.2 million following the successful launch and adoption of the JADE balloons.

Cardiovascular Systems announced the start of enrollment in a first-in-human trial for coronary everolimus drug-coated balloon in the fiscal second quarter. The company also reached numerous key development and pre-clinical testing milestones on its pVAD device for high-risk percutaneous coronary intervention. The company’s current pipeline, including the intravascular lithotripsy technology, is under development, thus instilling optimism. The latest receipt of the FDA’s pre-market approval of the Scoreflex NC scoring balloon raises investors’ confidence.

Key Picks

A few better-ranked stocks in the broader medical space are Henry Schein, Inc. (HSIC Quick QuoteHSIC - Free Report) , Owens & Minor, Inc. (OMI Quick QuoteOMI - Free Report) and AmerisourceBergen Corporation .

Henry Schein has an estimated long-term growth rate of 11.8%. Henry Schein’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein has outperformed the industry over the past year. HSIC has gained 27.8% compared with the industry’s 9.1% rise over the past year.

Owens & Minor has a long-term earnings growth rate of 23.6%. Owens & Minor’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 29.5%, on average. It carries a Zacks Rank #2 (Buy).

Owens & Minor has outperformed the industry over the past year. OMI has gained 9.7% against a 16.2% industry decline in the said period.

AmerisourceBergen has a long-term earnings growth rate of 8.2%. In the trailing four quarters, AmerisourceBergen’s earnings surpassed estimates in three and missed the same in one, delivering an average surprise of 2.3%. The stock currently sports a Zacks Rank #2.

AmerisourceBergen has outperformed its industry in the past year, gaining 29.1% versus the industry’s 9.1% rise.