It has been about a month since the last earnings report for NuVasive . Shares have lost about 15.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NuVasive due for a breakout? 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 drivers.
NuVasive Q4 Earnings Lag Estimates, Margins Down
NuVasive delivered adjusted earnings per share of 43 cents in fourth-quarter 2022, up 7.5% year over year. However, the figure lagged the Zacks Consensus Estimate by 12.2%.
The one-time adjustments include expenses associated with certain business transition costs and European medical device regulations.
GAAP earnings per share of 42 cents compared favorably with the year-ago loss of 71 cents.
In the full year, adjusted earnings per share were $1.98, up 17.9% from the year-ago period’s levels. However, the figure missed the Zacks Consensus Estimate by 2.9%.
Total Revenues
Revenues in the fourth quarter totaled $305.4 million, up 1.11% year over year on a reported basis and 4.8% at a constant exchange rate or CER. The top line, however, missed the Zacks Consensus Estimate by 1.8%.
Fourth quarter total net sales were driven by further adoption of new products and solid procedural volumes in the United States.
Total revenues for 2022 were $1.20 billion, up 5.5% from the year-ago period’s levels. The figure lagged the Zacks Consensus Estimate by 0.8%.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 4.6% year over year to $167.8 million on continued growth in the Simplify Cervical Disc and C360 portfolios.
Revenues from the U.S. Surgical Support business were $69.2 million in the fourth quarter, flat year over year. Growth was partially offset by a decline in Biologics.
International net sales for the third quarter were $68.4 million, representing a decline of 4.9% year over year (up 10.7% at CER).
Margin Details
In the reported quarter, gross profit fell 1.8% year over year to $214.7 million. The gross margin contracted 207 basis points (bps) to 70%.
Selling, general and administrative expenses fell 0.9% year over year to $159 million, whereas research and development (R&D) expenses rose 1.4% year over year to $25.6 million.
Overall adjusted operating profit was $29.9 million, down 8.2% year-ago figure. Adjusted operating margin saw a 99-bp contraction year over year to 9.8%.
Financial Details
The company exited 2022 with cash and cash equivalents of $248.7 million, compared with $246.1 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of 2022 was $169.1 million compared with the prior-year period’s $182.2 million.
2023 Guidance
NuVasive provided its guidance for full-year 2023.
The company expects 2023 net sales growth of 6-8% on an as-reported and constant-currency basis. The Zacks Consensus Estimate for the same is pegged at $1.28 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -10.59% due to these changes.
VGM Scores
At this time, NuVasive has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Outlook
Estimates have been broadly trending downward 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 belongs to the Zacks Medical - Products industry. Another stock from the same industry, Cardiovascular Systems , has gained 0.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
Cardiovascular Systems reported revenues of $61.45 million in the last reported quarter, representing a year-over-year change of +3.9%. EPS of -$0.20 for the same period compares with -$0.23 a year ago.
Cardiovascular Systems is expected to post a loss of $0.15 per share for the current quarter, representing a year-over-year change of +40%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Cardiovascular Systems. Also, the stock has a VGM Score of D.
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Why Is NuVasive (NUVA) Down 15.9% Since Last Earnings Report?
It has been about a month since the last earnings report for NuVasive . Shares have lost about 15.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NuVasive due for a breakout? 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 drivers.
NuVasive Q4 Earnings Lag Estimates, Margins Down
NuVasive delivered adjusted earnings per share of 43 cents in fourth-quarter 2022, up 7.5% year over year. However, the figure lagged the Zacks Consensus Estimate by 12.2%.
The one-time adjustments include expenses associated with certain business transition costs and European medical device regulations.
GAAP earnings per share of 42 cents compared favorably with the year-ago loss of 71 cents.
In the full year, adjusted earnings per share were $1.98, up 17.9% from the year-ago period’s levels. However, the figure missed the Zacks Consensus Estimate by 2.9%.
Total Revenues
Revenues in the fourth quarter totaled $305.4 million, up 1.11% year over year on a reported basis and 4.8% at a constant exchange rate or CER. The top line, however, missed the Zacks Consensus Estimate by 1.8%.
Fourth quarter total net sales were driven by further adoption of new products and solid procedural volumes in the United States.
Total revenues for 2022 were $1.20 billion, up 5.5% from the year-ago period’s levels. The figure lagged the Zacks Consensus Estimate by 0.8%.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 4.6% year over year to $167.8 million on continued growth in the Simplify Cervical Disc and C360 portfolios.
Revenues from the U.S. Surgical Support business were $69.2 million in the fourth quarter, flat year over year. Growth was partially offset by a decline in Biologics.
International net sales for the third quarter were $68.4 million, representing a decline of 4.9% year over year (up 10.7% at CER).
Margin Details
In the reported quarter, gross profit fell 1.8% year over year to $214.7 million. The gross margin contracted 207 basis points (bps) to 70%.
Selling, general and administrative expenses fell 0.9% year over year to $159 million, whereas research and development (R&D) expenses rose 1.4% year over year to $25.6 million.
Overall adjusted operating profit was $29.9 million, down 8.2% year-ago figure. Adjusted operating margin saw a 99-bp contraction year over year to 9.8%.
Financial Details
The company exited 2022 with cash and cash equivalents of $248.7 million, compared with $246.1 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of 2022 was $169.1 million compared with the prior-year period’s $182.2 million.
2023 Guidance
NuVasive provided its guidance for full-year 2023.
The company expects 2023 net sales growth of 6-8% on an as-reported and constant-currency basis. The Zacks Consensus Estimate for the same is pegged at $1.28 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -10.59% due to these changes.
VGM Scores
At this time, NuVasive has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Outlook
Estimates have been broadly trending downward 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 belongs to the Zacks Medical - Products industry. Another stock from the same industry, Cardiovascular Systems , has gained 0.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
Cardiovascular Systems reported revenues of $61.45 million in the last reported quarter, representing a year-over-year change of +3.9%. EPS of -$0.20 for the same period compares with -$0.23 a year ago.
Cardiovascular Systems is expected to post a loss of $0.15 per share for the current quarter, representing a year-over-year change of +40%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Cardiovascular Systems. Also, the stock has a VGM Score of D.