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Nevro Corp. (NVRO - Free Report) reported an adjusted loss per share of 62 cents for the third quarter of 2022, narrower than the loss of 87 cents reported in the year-ago quarter. Loss per share was narrower than the Zacks Consensus Estimate of a loss of 71 cents.
GAAP earnings per share (EPS) was $2.22 in the third quarter against the year-earlier loss of $1.44 per share.
Revenues in Detail
Nevro registered worldwide revenues of $100.5 million in the third quarter, up 7.8% year over year on a reported basis. The figure exceeded the Zacks Consensus Estimate by 1.4%.
At constant exchange rate (CER), revenues were up 10% year over year.
Worldwide revenues in the reported quarter include approximately $13.4 million of Painful Diabetic Neuropathy (PDN) revenues, representing 13% of worldwide permanent implant procedures.
Quarterly Highlights
In the quarter under review, international revenues were $14.3 million, down 5% year over year on a reported basis. At CER, international revenues improved 8%.
International revenues, especially in the UK, continued to be impacted by COVID-related issues and foreign-currency headwinds throughout the quarter.
U.S. revenues for the quarter totaled $86.1 million, up 10% year over year. Total U.S. permanent implant procedures increased 16%, while U.S. trial procedures increased 16%.
U.S. PDN trial procedures grew by 22% sequentially.
In the quarter under review, Nevro’s gross profit rose 7.2% to $69.3 million. Gross margin, however, contracted 36 basis points (bps) to 68.9%.
Sales, general & administrative expenses fell 1.7% to $78.2 million. Research and development expenses went up 21.4% year over year to $14 million. Adjusted operating expenses of $92.2 million increased 1.3% year over year.
Adjusted operating loss in the reported quarter totaled $22.9 million compared with adjusted operating loss of $26.4 million in the year-ago quarter.
Financial Position
Nevro exited third-quarter 2022 with cash and cash equivalents, and short-term investments of $386.9 million compared with $310.8 million at the end of the second quarter. Long-term debt at the end of third-quarter 2022 was $186.6 million compared with $186.3 million at the end of the second quarter.
As of Sep 30, 2022, 290,000,000 shares were authorized, 36,107,515 shares issued and 35,424,599 shares were outstanding.
Guidance
Nevro issued its financial outlook for the fourth quarter of 2022 and revised the same for the full year.
The company now expects its full-year 2022 worldwide revenues to be in the range of $403 million to $407 million, narrowed from the earlier projections of $400 million-$410 million (reflecting growth of 3-6% from the comparable reported figure of 2021. The Zacks Consensus Estimate for the same is pegged at $404.5 million.
Full-year 2022 worldwide revenue guidance includes approximately $45 million-$47 million of PDN revenues, up from the previous projection of $42 million-$45 million of PDN revenues.
For the fourth quarter, Nevro expects a revenue uptick of 8-11%. The Zacks Consensus Estimate for the same reflects an improvement of 10.3%.
At CER, fourth-quarter revenues are expected to reflect growth of 9-13%.
Our Take
Nevro exited the third quarter of 2022 with better-than-expected results. An improvement in overall top line and robust domestic revenues is impressive. Uptick in total U.S. permanent implant procedures and U.S. trial procedures is promising. The sequential improvement in U.S. PDN trial procedures is encouraging. The company received the FDA’s approval for the Senza HFX iQ spinal cord stimulation (SCS) system powered by artificial intelligence and its manufacturing operations in Costa Rica for the production of its proprietary SCS systems for the treatment of chronic pain, including its HFX product platform (both in October), which raises our optimism about the stock.
Nevro also announced multiple positive payer coverage updates for the treatment of PDN from Aetna and several additional Blue Cross Blue Shield health plans, which are other quarterly highlights.
On the flip side, dismal bottom-line performances are concerning. Lower international revenues are discouraging as well. The sustained operating loss incurred by Nevro also raises our apprehension. The contraction of the gross margin also does not bode well. Nevro continues to face an unstable business environment due to inflation and supply-chain pressures, which further raises our apprehension.
Zacks Rank and Other Key Picks
Nevro currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Nevro (NVRO) Q3 Earnings Beat Estimates, 2022 View Revised
Nevro Corp. (NVRO - Free Report) reported an adjusted loss per share of 62 cents for the third quarter of 2022, narrower than the loss of 87 cents reported in the year-ago quarter. Loss per share was narrower than the Zacks Consensus Estimate of a loss of 71 cents.
GAAP earnings per share (EPS) was $2.22 in the third quarter against the year-earlier loss of $1.44 per share.
Revenues in Detail
Nevro registered worldwide revenues of $100.5 million in the third quarter, up 7.8% year over year on a reported basis. The figure exceeded the Zacks Consensus Estimate by 1.4%.
At constant exchange rate (CER), revenues were up 10% year over year.
Worldwide revenues in the reported quarter include approximately $13.4 million of Painful Diabetic Neuropathy (PDN) revenues, representing 13% of worldwide permanent implant procedures.
Quarterly Highlights
In the quarter under review, international revenues were $14.3 million, down 5% year over year on a reported basis. At CER, international revenues improved 8%.
International revenues, especially in the UK, continued to be impacted by COVID-related issues and foreign-currency headwinds throughout the quarter.
U.S. revenues for the quarter totaled $86.1 million, up 10% year over year. Total U.S. permanent implant procedures increased 16%, while U.S. trial procedures increased 16%.
U.S. PDN trial procedures grew by 22% sequentially.
Nevro Corp. Price, Consensus and EPS Surprise
Nevro Corp. price-consensus-eps-surprise-chart | Nevro Corp. Quote
Margin Trend
In the quarter under review, Nevro’s gross profit rose 7.2% to $69.3 million. Gross margin, however, contracted 36 basis points (bps) to 68.9%.
Sales, general & administrative expenses fell 1.7% to $78.2 million. Research and development expenses went up 21.4% year over year to $14 million. Adjusted operating expenses of $92.2 million increased 1.3% year over year.
Adjusted operating loss in the reported quarter totaled $22.9 million compared with adjusted operating loss of $26.4 million in the year-ago quarter.
Financial Position
Nevro exited third-quarter 2022 with cash and cash equivalents, and short-term investments of $386.9 million compared with $310.8 million at the end of the second quarter. Long-term debt at the end of third-quarter 2022 was $186.6 million compared with $186.3 million at the end of the second quarter.
As of Sep 30, 2022, 290,000,000 shares were authorized, 36,107,515 shares issued and 35,424,599 shares were outstanding.
Guidance
Nevro issued its financial outlook for the fourth quarter of 2022 and revised the same for the full year.
The company now expects its full-year 2022 worldwide revenues to be in the range of $403 million to $407 million, narrowed from the earlier projections of $400 million-$410 million (reflecting growth of 3-6% from the comparable reported figure of 2021. The Zacks Consensus Estimate for the same is pegged at $404.5 million.
Full-year 2022 worldwide revenue guidance includes approximately $45 million-$47 million of PDN revenues, up from the previous projection of $42 million-$45 million of PDN revenues.
For the fourth quarter, Nevro expects a revenue uptick of 8-11%. The Zacks Consensus Estimate for the same reflects an improvement of 10.3%.
At CER, fourth-quarter revenues are expected to reflect growth of 9-13%.
Our Take
Nevro exited the third quarter of 2022 with better-than-expected results. An improvement in overall top line and robust domestic revenues is impressive. Uptick in total U.S. permanent implant procedures and U.S. trial procedures is promising. The sequential improvement in U.S. PDN trial procedures is encouraging. The company received the FDA’s approval for the Senza HFX iQ spinal cord stimulation (SCS) system powered by artificial intelligence and its manufacturing operations in Costa Rica for the production of its proprietary SCS systems for the treatment of chronic pain, including its HFX product platform (both in October), which raises our optimism about the stock.
Nevro also announced multiple positive payer coverage updates for the treatment of PDN from Aetna and several additional Blue Cross Blue Shield health plans, which are other quarterly highlights.
On the flip side, dismal bottom-line performances are concerning. Lower international revenues are discouraging as well. The sustained operating loss incurred by Nevro also raises our apprehension. The contraction of the gross margin also does not bode well. Nevro continues to face an unstable business environment due to inflation and supply-chain pressures, which further raises our apprehension.
Zacks Rank and Other Key Picks
Nevro currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.