It has been about a month since the last earnings report for NuVasive (
NUVA Quick Quote NUVA - Free Report) . Shares have added about 6.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NuVasive 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 catalysts.
NuVasive Q1 Earnings Beat Estimates, 2022 View Up
NuVasive delivered first-quarter 2022 adjusted earnings per share of 54 cents, registering a 45.9% increase from the year-ago adjusted earnings per share of 37 cents. The figure surpassed the Zacks Consensus Estimate by 42.1%.
The one-time adjustments include expenses associated with certain business transition costs and amortization expenses, among others. GAAP earnings per share of 35 cents shows a huge improvement from the year-ago loss per share of 15 cents. Total Revenues
Revenues in the first quarter totaled $290.8 million, up 7.2% year over year on a reported basis and up 9.1% at constant exchange rate or CER. The top line beat the Zacks Consensus Estimate by 4.8%.
First-quarter revenue growth was driven by continued positive momentum from new products, including the Pulse platform and the cervical portfolio featuring the Simplify Cervical Disc. Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 7.2% year over year to $155.6 million on strong performance by the thoracolumbar and cervical portfolios.
Revenues from the U.S. Surgical Support business were $63.6 million in the first quarter, up 3.8% year over year, led by strong sales of the Pulse platform within the Biologics business. However, this growth was somewhat offset by a year-over-year decline in NuVasive Clinical Services results. In the quarter, the company’s international business delivered a strong performance, exhibiting double-digit growth across Europe, Latin America and Japan. Margin Details
In the reported quarter, gross profit rose 6.1% year over year to $211.7 million. Gross margin contracted 73 basis points (bps) to 72.8%.
Selling, general and administrative expenses rose 9.8% year over year to $160.3 million, whereas research and development (R&D) expenses climbed 5.1% year over year to $23.4 million. Overall adjusted operating profit was $28 million, down 10.3% from the year-ago figure. Adjusted operating margin saw a 189-bp contraction year over year to 9.6%. Financial Details
The company exited the first quarter of 2022 with cash and cash equivalents of $205.3 million compared with $246.1 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of the quarter was $6.5 million compared with the prior-year period’s $31.6 million. 2022 Guidance
NuVasive has updated its financial outlook for full-year 2022.
The company currently expects to report revenue growth in the range of 6-8% on a reported basis and 7.5-9.5% at CER (up from the previously projected 5-8% on a reported basis and 6-9% at CER). The Zacks Consensus Estimate for revenues is pegged at $1.22 billion. Adjusted EPS is projected in the range of $2.15-$2.45 (up from the prior estimated $2.05−$2.35). The Zacks Consensus Estimate for the same is pegged at $2.16. The company has maintained its adjusted operating margin guidance at the range of 13% to 14.5%. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
At this time, NuVasive has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, NuVasive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
NuVasive is part of the Zacks Medical - Products industry. Over the past month, Bio-Rad Laboratories (
BIO Quick Quote BIO - Free Report) , a stock from the same industry, has gained 8.9%. The company reported its results for the quarter ended March 2022 more than a month ago.
Bio-Rad reported revenues of $700.06 million in the last reported quarter, representing a year-over-year change of -3.7%. EPS of $4.94 for the same period compares with $5.21 a year ago.
For the current quarter, Bio-Rad is expected to post earnings of $2.46 per share, indicating a change of -30.5% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Bio-Rad has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.