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ShockWave Medical (SWAV) Hits 52-Week High: Will it Continue?
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ShockWave Medical, Inc. (SWAV - Free Report) is well poised for growth, backed by its research and development (R&D) efforts and focus on clinical studies.
Shares of this presently Zacks Rank #3 (Hold) company have risen 33.5% compared with the industry’s 4.4% growth so far this year. The S&P 500 Index has risen 10.4% in the same time frame.
This medical device company, with a market capitalization of $10.34 billion, is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated.
ShockWave Medical’s earnings yield of 1.4% compares favorably with the industry’s (7%). The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 98.84%.
Image Source: Zacks Investment Research
The continued outperformance has driven a more than 50% increase in SWAV stock price in the past year. New product launches, along with robust demand for SWAV’s products, are likely to drive share prices higher. Investors should continue to follow the stock for a potential close above the 52-week high, following which the share price may rally further.
What’s Driving the Company’s Performance?
ShockWave Medical invests in R&D efforts to accelerate its Intravascular Lithotripsy (IVL) Technology, thereby broadening and enhancing its existing product offerings. In the first quarter of 2023, the company incurred R&D expenses of $27 million, up 58.5% from the prior-year quarter’s level.
Its revenues improved 72% to $161.1 million on the back of strong demand for its commercialized products. Robust quarterly results led ShockWave Medical to raise its revenue outlook by $40 million to $700-$720 million on its first-quarter earnings call.
The company’s R&D activities have led to the launch of several promising IVL products, driving its top-line growth in the past. SWAV received FDA clearance for its L6 Peripheral IVL Catheter recently.
ShockWave Medical believes in its ability to rapidly develop innovative products, owing to a dynamic product innovation process. The versatility and leveraging ability of its core technology and management philosophy continues to improve its R&D process.
SWAV recruited and retained engineers and scientists with substantial expertise in developing medical devices. Its pipeline products in various stages of development are anticipated to provide additional commercial opportunities, following a potential approval.
Since its inception, the company has been committed to generating clinical data to show the safety and effectiveness of its IVL Technology. The initial studies consistently highlighted low rate of complications, irrespective of the type of vessel being examined.
Apart from getting regulatory approvals or clearances, data from SWAV’s clinical studies strengthen its ability to drive the adoption of IVL Technology throughout multiple therapies in its existing and new market segments.
ShockWave Medical’s past studies guided optimal IVL procedure technique and enriched the design of its IVL System and products under development. Management is optimistic about the continued clinical acceptance and penetration of IVL, as demonstrated by its strong first-quarter 2023 results and a higher outlook for 2023 revenues.
The company has ongoing clinical programs for several products and indications. On being successful, these will enable SWAV to expand the commercialization of its products into new geographies and indications.
ShockWave Medical received regulatory approval for the C2 Coronary IVL Catheter in Japan in 2022. The company also announced the introduction and global availability of the M5+ peripheral IVL catheter, post the receipt of the CE mark and the FDA clearance last year. These products should drive SWAV’s revenue growth in 2023.
What’s the Downside?
ShockWave Medical faces challenges in evaluating its current business and future financial growth, thanks to limited commercialization expertise and approved or cleared products.
Merit Medical Systems has an estimated long-term growth rate of 11%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.22%.
So far this year, MMSI’s shares have risen 18.9% compared with the industry’s 8.7% growth.
West Pharmaceutical Services has an estimated long-term growth rate of 6.3%. Its earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 13.61%.
So far this year, WST’s shares have gained 49.1% compared with the industry’s 8.7% growth.
Perrigo’s earnings are expected to improve 24.2% in 2023. The strong momentum is likely to continue in 2024 as well. PRGO’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average negative surprise being 0.79%.
The company has lost 1.9% so far this year against the industry’s 4.8% growth
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ShockWave Medical (SWAV) Hits 52-Week High: Will it Continue?
ShockWave Medical, Inc. (SWAV - Free Report) is well poised for growth, backed by its research and development (R&D) efforts and focus on clinical studies.
Shares of this presently Zacks Rank #3 (Hold) company have risen 33.5% compared with the industry’s 4.4% growth so far this year. The S&P 500 Index has risen 10.4% in the same time frame.
This medical device company, with a market capitalization of $10.34 billion, is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated.
ShockWave Medical’s earnings yield of 1.4% compares favorably with the industry’s (7%). The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 98.84%.
Image Source: Zacks Investment Research
The continued outperformance has driven a more than 50% increase in SWAV stock price in the past year. New product launches, along with robust demand for SWAV’s products, are likely to drive share prices higher. Investors should continue to follow the stock for a potential close above the 52-week high, following which the share price may rally further.
What’s Driving the Company’s Performance?
ShockWave Medical invests in R&D efforts to accelerate its Intravascular Lithotripsy (IVL) Technology, thereby broadening and enhancing its existing product offerings. In the first quarter of 2023, the company incurred R&D expenses of $27 million, up 58.5% from the prior-year quarter’s level.
Its revenues improved 72% to $161.1 million on the back of strong demand for its commercialized products. Robust quarterly results led ShockWave Medical to raise its revenue outlook by $40 million to $700-$720 million on its first-quarter earnings call.
The company’s R&D activities have led to the launch of several promising IVL products, driving its top-line growth in the past. SWAV received FDA clearance for its L6 Peripheral IVL Catheter recently.
ShockWave Medical believes in its ability to rapidly develop innovative products, owing to a dynamic product innovation process. The versatility and leveraging ability of its core technology and management philosophy continues to improve its R&D process.
SWAV recruited and retained engineers and scientists with substantial expertise in developing medical devices. Its pipeline products in various stages of development are anticipated to provide additional commercial opportunities, following a potential approval.
Since its inception, the company has been committed to generating clinical data to show the safety and effectiveness of its IVL Technology. The initial studies consistently highlighted low rate of complications, irrespective of the type of vessel being examined.
Apart from getting regulatory approvals or clearances, data from SWAV’s clinical studies strengthen its ability to drive the adoption of IVL Technology throughout multiple therapies in its existing and new market segments.
ShockWave Medical’s past studies guided optimal IVL procedure technique and enriched the design of its IVL System and products under development. Management is optimistic about the continued clinical acceptance and penetration of IVL, as demonstrated by its strong first-quarter 2023 results and a higher outlook for 2023 revenues.
The company has ongoing clinical programs for several products and indications. On being successful, these will enable SWAV to expand the commercialization of its products into new geographies and indications.
ShockWave Medical received regulatory approval for the C2 Coronary IVL Catheter in Japan in 2022. The company also announced the introduction and global availability of the M5+ peripheral IVL catheter, post the receipt of the CE mark and the FDA clearance last year. These products should drive SWAV’s revenue growth in 2023.
What’s the Downside?
ShockWave Medical faces challenges in evaluating its current business and future financial growth, thanks to limited commercialization expertise and approved or cleared products.
ShockWave Medical, Inc. Price
ShockWave Medical, Inc. price | ShockWave Medical, Inc. Quote
Key Picks
Some better-ranked stocks from the broader medical space are Merit Medical Systems (MMSI - Free Report) , West Pharmaceutical Services (WST - Free Report) and Perrigo (PRGO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merit Medical Systems has an estimated long-term growth rate of 11%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.22%.
So far this year, MMSI’s shares have risen 18.9% compared with the industry’s 8.7% growth.
West Pharmaceutical Services has an estimated long-term growth rate of 6.3%. Its earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 13.61%.
So far this year, WST’s shares have gained 49.1% compared with the industry’s 8.7% growth.
Perrigo’s earnings are expected to improve 24.2% in 2023. The strong momentum is likely to continue in 2024 as well. PRGO’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average negative surprise being 0.79%.
The company has lost 1.9% so far this year against the industry’s 4.8% growth