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Reasons to Retain ShockWave Medical (SWAV) in Your Portfolio Now
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ShockWave Medical, Inc. is well poised for growth, backed by its research and development (R&D) efforts and focus on clinical studies.
Shares of this Zacks Rank #3 (Hold) company have risen 1.4% compared with the industry’s 3.7% growth in the past year. The S&P 500 Index has soared 25.3% in the same time frame.
With a market capitalization of $7.03 billion, this medical device company is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated.
Image Source: Zacks Investment Research
ShockWave Medical’s earnings yield of 2.4% compares favorably with the industry’s (4.6%). Its earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 75.71%.
What’s Driving the Company’s Performance?
SWAV invests in R&D efforts to accelerate its Intravascular Lithotripsy (IVL)Technology, thereby broadening and enhancing its existing product offerings. In the third quarter of 2023, the company incurred R&D expenses of $39.5 million, up 95.9% from the prior-year quarter’s level.
For 2024, revenues are expected to grow almost 26% year over year to $916 million.
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 continue to improve its R&D process. In October, SWAV announced favorable and consistent outcomes with coronary IVL in both nodular and eccentric calcium.
Management is optimistic about the continued clinical acceptance and penetration of IVL. Considering the fact that the C2+ device holds a strong demand in the international market, the launch of the same in the United States looks promising. This is due to the technology’s strong results in the past few quarters.
In August, the Centers for Medicare & Medicaid Services (“CMS”) created new Medicare Severity Diagnosis Related Group (MS-DRG) codes and payments for coronary IVL in the hospital inpatient setting. Per the codes, new coronary IVL-specific MS-DRGs are associated with higher payments than the MS-DRG payments for other Percutaneous Coronary Intervention procedures.
Again, the CMS established a Category I Current Procedural Terminology add-on code for procedures involving coronary IVL earlier this month. Under this new category, physicians will get a 20-30% increase in remuneration for the additional work associated with performing coronary IVL.
The higher pay rates for physicians performing IVL procedures are likely to benefit the adoption of ShockWave Medical’s products, thereby boosting its top-line growth.
What’s the Downside?
Limited commercialization expertise and approved or cleared products pose a challenge in evaluating SWAV’s current business and determining future financial growth.
Estimate Trend
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $727.3 million, indicating an improvement of 48.5% from the previous year’s reported figure. The same for adjusted earnings per share is pinned at $3.62.
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Biodesix (BDSX - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 42.7% in the past year compared with the industry’s 9.6% growth.
Biodesix, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.76%.
Biodesix’s shares have lost 13.2% in the past year compared with the industry’s 3.2% decline.
Integer Holdings, sporting a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 43.5% in the past year against the industry’s 3.7% decline.
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Reasons to Retain ShockWave Medical (SWAV) in Your Portfolio Now
ShockWave Medical, Inc. is well poised for growth, backed by its research and development (R&D) efforts and focus on clinical studies.
Shares of this Zacks Rank #3 (Hold) company have risen 1.4% compared with the industry’s 3.7% growth in the past year. The S&P 500 Index has soared 25.3% in the same time frame.
With a market capitalization of $7.03 billion, this medical device company is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated.
Image Source: Zacks Investment Research
ShockWave Medical’s earnings yield of 2.4% compares favorably with the industry’s (4.6%). Its earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 75.71%.
What’s Driving the Company’s Performance?
SWAV invests in R&D efforts to accelerate its Intravascular Lithotripsy (IVL)Technology, thereby broadening and enhancing its existing product offerings. In the third quarter of 2023, the company incurred R&D expenses of $39.5 million, up 95.9% from the prior-year quarter’s level.
For 2024, revenues are expected to grow almost 26% year over year to $916 million.
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 continue to improve its R&D process. In October, SWAV announced favorable and consistent outcomes with coronary IVL in both nodular and eccentric calcium.
Management is optimistic about the continued clinical acceptance and penetration of IVL. Considering the fact that the C2+ device holds a strong demand in the international market, the launch of the same in the United States looks promising. This is due to the technology’s strong results in the past few quarters.
In August, the Centers for Medicare & Medicaid Services (“CMS”) created new Medicare Severity Diagnosis Related Group (MS-DRG) codes and payments for coronary IVL in the hospital inpatient setting. Per the codes, new coronary IVL-specific MS-DRGs are associated with higher payments than the MS-DRG payments for other Percutaneous Coronary Intervention procedures.
Again, the CMS established a Category I Current Procedural Terminology add-on code for procedures involving coronary IVL earlier this month. Under this new category, physicians will get a 20-30% increase in remuneration for the additional work associated with performing coronary IVL.
The higher pay rates for physicians performing IVL procedures are likely to benefit the adoption of ShockWave Medical’s products, thereby boosting its top-line growth.
What’s the Downside?
Limited commercialization expertise and approved or cleared products pose a challenge in evaluating SWAV’s current business and determining future financial growth.
Estimate Trend
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $727.3 million, indicating an improvement of 48.5% from the previous year’s reported figure. The same for adjusted earnings per share is pinned at $3.62.
ShockWave Medical, Inc. Price
ShockWave Medical, Inc. price | ShockWave Medical, Inc. Quote
Stocks to Consider
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Biodesix (BDSX - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 42.7% in the past year compared with the industry’s 9.6% growth.
Biodesix, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.76%.
Biodesix’s shares have lost 13.2% in the past year compared with the industry’s 3.2% decline.
Integer Holdings, sporting a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 43.5% in the past year against the industry’s 3.7% decline.