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Nevro (NVRO) Q4 Earnings Lag Estimates, Revenues Beat
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Nevro Corp. (NVRO - Free Report) reported a loss per share of 54 cents for the fourth quarter of 2022, narrower than a loss of 86 cents reported in the year-ago quarter. However, the loss per share was wider than the Zacks Consensus Estimate of a loss of 49 cents.
Our projection of loss per share was 52 cents.
Full-year earnings per share (EPS) were 8 cents against a loss of $3.77 at the end of 2021.
Our projection of full-year EPS was a penny.
Revenues in Detail
Nevro registered worldwide revenues of $113.8 million in the fourth quarter, up 10.8% year over year on a reported basis. The figure exceeded the Zacks Consensus Estimate by 0.5%.
At constant exchange rate (CER), revenues were up 12% year over year.
The fourth-quarter revenue compares to our estimate of $111.4 million.
Worldwide revenues in the reported quarter include approximately $17.3 million of Painful Diabetic Neuropathy (PDN) indication sales, representing 16% of worldwide permanent implant procedures.
Full-year revenues were $406.4 million, reflecting a 5% improvement from the comparable 2021 period. At CER, revenues were up 7% from the comparable 2021 period.
Our projection of full-year revenues was $404 million.
Quarterly Highlights
In the quarter under review, international revenues were $14.1 million, down 1.4% year over year on a reported basis. However, international revenues improved 9% at CER.
This figure compares to our fourth-quarter projection of $16.6 million.
U.S. revenues for the quarter totaled $99.8 million, up 12.9% year over year. This figure compares to our fourth-quarter projection of $94.9 million.
Total U.S. permanent implant procedures increased 13%, while U.S. trial procedures increased 9%. U.S. PDN trial procedures surged 197% from the prior-year quarter.
In the quarter under review, Nevro’s gross profit rose 8.8% to $75.2 million. However, the gross margin contracted 119 basis points to 66.1%.
Sales, general & administrative expenses fell 2.4% to $80.7 million. Research and development expenses went up 9.7% year over year to $13.9 million. Adjusted operating expenses of $94.6 million decreased 0.8% year over year.
Adjusted operating loss in the reported quarter totaled $19.4 million compared with an adjusted operating loss of $26.2 million in the year-ago quarter.
Financial Position
Nevro exited the full-year 2022 with cash and cash equivalents and short-term investments of $374.4 million compared with $362 million at the end of 2021. Long-term debt at the end of 2022 was $186.9 million compared with $151.3 million at the end of 2021.
As of Dec 31, 2022, 36,203,423 shares were issued and 35,520,507 shares were outstanding.
Guidance
Nevro has reiterated its financial outlook for the full-year 2023, provided at the time of the announcement of its preliminary results for the fourth quarter and full-year 2022 last month.
The company expects its full-year 2023 worldwide revenues to be in the range of $445 million to $455 million, indicating reported growth of 10-12% from the comparable reported figure of 2022. The Zacks Consensus Estimate for the same is pegged at $446.4 million.
At CER, full-year revenues are expected to reflect growth of 10-13%.
Full-year 2022 worldwide revenue guidance includes approximately $75 million-$85 million of PDN indication sales, suggesting reported growth of 56-77% from the comparable reported figure of 2022.
Our Take
Nevro exited the fourth quarter of 2022 with better-than-expected revenues. An improvement in overall top-line and bottom-line results and robust domestic revenues are impressive. An uptick in total U.S. permanent implant procedures and U.S. trial procedures is promising. The improvement in U.S. PDN trial procedures is encouraging as well. The robust performance of Nevro’s new AI-powered HFX iQ Spinal Cord Stimulation System in the limited market release with positive feedback from physicians and patients raises optimism about the stock.
In January, Nevro announced the presentation of favorable complete 24-months PDN RCT trial data and the 12-month Quality of Life RCT data, which raises optimism about the stock.
On the flip side, lower-than-expected earnings in the reported quarter and dismal bottom-line performances are disappointing. Lower international revenues on a reported basis 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 Key Picks
Nevro currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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Nevro (NVRO) Q4 Earnings Lag Estimates, Revenues Beat
Nevro Corp. (NVRO - Free Report) reported a loss per share of 54 cents for the fourth quarter of 2022, narrower than a loss of 86 cents reported in the year-ago quarter. However, the loss per share was wider than the Zacks Consensus Estimate of a loss of 49 cents.
Our projection of loss per share was 52 cents.
Full-year earnings per share (EPS) were 8 cents against a loss of $3.77 at the end of 2021.
Our projection of full-year EPS was a penny.
Revenues in Detail
Nevro registered worldwide revenues of $113.8 million in the fourth quarter, up 10.8% year over year on a reported basis. The figure exceeded the Zacks Consensus Estimate by 0.5%.
At constant exchange rate (CER), revenues were up 12% year over year.
The fourth-quarter revenue compares to our estimate of $111.4 million.
Worldwide revenues in the reported quarter include approximately $17.3 million of Painful Diabetic Neuropathy (PDN) indication sales, representing 16% of worldwide permanent implant procedures.
Full-year revenues were $406.4 million, reflecting a 5% improvement from the comparable 2021 period. At CER, revenues were up 7% from the comparable 2021 period.
Our projection of full-year revenues was $404 million.
Quarterly Highlights
In the quarter under review, international revenues were $14.1 million, down 1.4% year over year on a reported basis. However, international revenues improved 9% at CER.
This figure compares to our fourth-quarter projection of $16.6 million.
U.S. revenues for the quarter totaled $99.8 million, up 12.9% year over year. This figure compares to our fourth-quarter projection of $94.9 million.
Total U.S. permanent implant procedures increased 13%, while U.S. trial procedures increased 9%. U.S. PDN trial procedures surged 197% from the prior-year quarter.
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 8.8% to $75.2 million. However, the gross margin contracted 119 basis points to 66.1%.
Sales, general & administrative expenses fell 2.4% to $80.7 million. Research and development expenses went up 9.7% year over year to $13.9 million. Adjusted operating expenses of $94.6 million decreased 0.8% year over year.
Adjusted operating loss in the reported quarter totaled $19.4 million compared with an adjusted operating loss of $26.2 million in the year-ago quarter.
Financial Position
Nevro exited the full-year 2022 with cash and cash equivalents and short-term investments of $374.4 million compared with $362 million at the end of 2021. Long-term debt at the end of 2022 was $186.9 million compared with $151.3 million at the end of 2021.
As of Dec 31, 2022, 36,203,423 shares were issued and 35,520,507 shares were outstanding.
Guidance
Nevro has reiterated its financial outlook for the full-year 2023, provided at the time of the announcement of its preliminary results for the fourth quarter and full-year 2022 last month.
The company expects its full-year 2023 worldwide revenues to be in the range of $445 million to $455 million, indicating reported growth of 10-12% from the comparable reported figure of 2022. The Zacks Consensus Estimate for the same is pegged at $446.4 million.
At CER, full-year revenues are expected to reflect growth of 10-13%.
Full-year 2022 worldwide revenue guidance includes approximately $75 million-$85 million of PDN indication sales, suggesting reported growth of 56-77% from the comparable reported figure of 2022.
Our Take
Nevro exited the fourth quarter of 2022 with better-than-expected revenues. An improvement in overall top-line and bottom-line results and robust domestic revenues are impressive. An uptick in total U.S. permanent implant procedures and U.S. trial procedures is promising. The improvement in U.S. PDN trial procedures is encouraging as well. The robust performance of Nevro’s new AI-powered HFX iQ Spinal Cord Stimulation System in the limited market release with positive feedback from physicians and patients raises optimism about the stock.
In January, Nevro announced the presentation of favorable complete 24-months PDN RCT trial data and the 12-month Quality of Life RCT data, which raises optimism about the stock.
On the flip side, lower-than-expected earnings in the reported quarter and dismal bottom-line performances are disappointing. Lower international revenues on a reported basis 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 Key Picks
Nevro currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.