A month has gone by since the last earnings report for Shockwave Medical (
SWAV Quick Quote SWAV - Free Report) . Shares have lost about 8.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Shockwave Medical due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Shockwave Medical Beats on Q3 Earnings & Revenues
Shockwave Medical reported third-quarter 2022 earnings per share (EPS) of 92 cents, which surpassed the Zacks Consensus Estimate of 68 cents by 35.3%. It had reported an EPS of 5 cents in the year-ago quarter.
The company reported revenues of $131.3 million, which surged a whopping 101.6% from the prior-year quarter. The top line also outpaced the Zacks Consensus Estimate by 4.3%.
The company’s management stated that it continues to witness strength across the entire Shockwave franchise. The volume for the M5 product family gained nearly 70% in the first nine months in the United States compared with the same period last year. Management stated that the price increase for the M5+ product family in the U.S. market further contributed to top-line growth. The company’s M5 products volume more than doubled in international markets.
During the quarter, Shockwave Medical received FDA clearance for its Shockwave L6 Peripheral IVL Catheter, a bit ahead of schedule. The company plans to commence a limited release of that product soon.
The company also received CE marking for the Shockwave C2+ coronary catheter in August and launched. It initiated a limited release of the product in Europe during the second quarter. Shockwave Medical will go forward with the U.S. regulatory process based on the European progress for C2+ coronary catheter.
The Japanese Ministry of Health, Labour and Welfare granted reimbursement for the Shockwave C2 Coronary IVL Catheter during the quarter. The company plans to launch the product in Japan in January next year.
Gross profit in the reported quarter was $113.5 million, soaring 102% year over year. As a percentage of revenues, the gross margin in the quarter was 86%, up 300 basis points (bps).
Sales and marketing expenses amounted to $42.1 million, up 48.2% from the prior-year quarter. Research and development expenses totaled $14.4 million, up 55.8% on a year-over-year basis.
Operating income totaled $36.8 million compared with the year-ago quarter’s operating income of $2.8 million.
The company exited the third quarter with cash, cash equivalents and investments of $250.7 million, compared with $224.9 million in the previous quarter.
Total assets amounted to $475.8 million, compared with $417.1 million at the end of the second quarter.
2022 Revenue Outlook Raised
For 2022, Shockwave Medical now expects revenues in the range of $483 million to $488 million (up from the previously guided band of $465-$475 million), implying growth of 104-106% over the prior-year period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 14.15% due to these changes.
Currently, Shockwave Medical 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 D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 looks promising. It comes with little surprise Shockwave Medical has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Shockwave Medical belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Inogen (
INGN Quick Quote INGN - Free Report) , has gained 1.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Inogen reported revenues of $105.39 million in the last reported quarter, representing a year-over-year change of +13.2%. EPS of -$0.18 for the same period compares with $0.53 a year ago.
Inogen is expected to post a loss of $0.66 per share for the current quarter, representing a year-over-year change of +34.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Inogen. Also, the stock has a VGM Score of D.