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Nevro's (NVRO) Q4 Earnings and Sales Top Estimates, Margins Up
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Nevro Corp. (NVRO - Free Report) reported a loss per share of 25 cents in the fourth quarter of 2023 compared with the year-ago quarter’s loss of 54 cents. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of 50 cents.
Revenues in Detail
Nevro registered worldwide revenues of $116.2 million in the fourth quarter, up 2.0% year over year on a reported basis and constant-currency basis. The figure topped the Zacks Consensus Estimate by 0.2%.
Painful Diabetic Neuropathy (PDN) indication sales represented approximately $22.4 million (20%) of worldwide permanent implant procedures and increased 29% year over year.
Full-Years Results
Nevro recorded worldwide total revenues of $425.2 million in 2023, up 5.0% year over year. Adjusted loss per share for 2023 was $2.56 against the earnings per share (EPS) of 8 cents year over year.
Quarterly Highlights
In the quarter under review, international revenues were $14.7 million, up 4.0% year over year on a reported basis and flat at constant exchange rate (CER).
U.S. revenues for the quarter totaled $101.5 million, up 2.0% year over year.
Total U.S. permanent implant procedures increased 3%, while U.S. trial procedures decreased 1%. U.S. PDN trial procedures, representing approximately 24% of total U.S. trial volume, jumped 17% from the prior-year quarter.
Margin Trend
In the quarter under review, Nevro’s gross profit rose 8.3% to $81.5 million. The gross margin increased 400 basis points to 70.1%.
Sales, general & administrative expenses remained almost flat at $80.6 million. Research and development expenses decreased 10.9% year over year to $12.4 million. Total operating expenses of $93.3 million decreased 1.4% year over year. The decrease in operating expenses was primarily due to reduced marketing, development, and outside consulting expenses, which were partially offset by increased legal costs.
Additionally, the fourth quarter included $3.0 million in one-time expenses related to the Vyrsa acquisition.
The total operating loss in the reported quarter was $11.8 million compared with $19.4 million in the year-ago quarter.
Financial Position
Nevro exited the fourth quarter of 2023 with cash and cash equivalents and short-term investments of $322.7 million compared with $320.3 million at the end of the third quarter. Long-term debt at the end of fourth-quarter 2023 was $211.5 million compared with $186.9 million at the third-quarter end.
As of Dec 31, 2023, 37,044,390 shares were issued and 36,361,474 shares were outstanding.
Guidance
Nevro has provided its financial outlook for full-year and first-quarter 2024.
For the first quarter of 2024, Nevro expects its worldwide revenues to be in the range of $97 million-$99 million, reflecting growth of 1-3% year over year on a reported basis as well at CER. The Zacks Consensus Estimate is pegged at $97.2 million.
The company expects its 2024 worldwide revenues to be in the range of $435 million-$445 million, reflecting growth of 2-5% from the comparable figure of 2023 both on a reported basis and at CER. The Zacks Consensus Estimate is pegged at $444 million.
Our Take
Nevro exited the fourth quarter of 2023 with better-than-expected results and an improvement in revenues, which surpassed its consensus estimate. The company’s robust domestic revenues were also impressive. An uptick was observed in total U.S. permanent implant procedures, while the U.S. trial procedures declined 1%. The improvement in U.S. PDN trial procedures was also encouraging.
The gross margin improved for the company with the lowering of operating expenses. However, loss at the operating level persisted for the company.
In the fourth quarter, Nevro acquired Vyrsa Technologies (Vyrsa), a medical technology company focused on a minimally invasive treatment option for patients suffering from chronic sacroiliac joint (SI joint) pain.
The company also closed a six-year, $200 million term loan credit facility, the proceeds of which were used to repurchase the majority of the company’s 2025 Convertible Notes, the acquisition of Vyrsa and for working capital and other general corporate purposes.
In January 2024, Nevro implemented restructuring, including laying off 5% of its workforce, a vast majority of which affected internally focused employees and non-customer-facing personnel in the field to support the company’s long-term growth and profitability.
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cencora, Inc. (COR - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
Cencora, carrying a Zacks Rank of 2 (Buy), reported first-quarter fiscal 2024 adjusted EPS of $3.28, beating the Zacks Consensus Estimate by 14.7%. Revenues of $72.25 billion outpaced the consensus mark by 5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cencora has a long-term estimated growth rate of 8.6%. COR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.7%.
Elevance Health reported fourth-quarter 2023 adjusted EPS of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
Cardinal Health reported second-quarter fiscal 2024 adjusted EPS of $1.82, beating the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion surpassed the Zacks Consensus Estimate by 1.1%. It currently carries a Zacks Rank #2.
Cardinal Health has a long-term estimated growth rate of 15.9%. CAH’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 15.6%.
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Nevro's (NVRO) Q4 Earnings and Sales Top Estimates, Margins Up
Nevro Corp. (NVRO - Free Report) reported a loss per share of 25 cents in the fourth quarter of 2023 compared with the year-ago quarter’s loss of 54 cents. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of 50 cents.
Revenues in Detail
Nevro registered worldwide revenues of $116.2 million in the fourth quarter, up 2.0% year over year on a reported basis and constant-currency basis. The figure topped the Zacks Consensus Estimate by 0.2%.
Painful Diabetic Neuropathy (PDN) indication sales represented approximately $22.4 million (20%) of worldwide permanent implant procedures and increased 29% year over year.
Full-Years Results
Nevro recorded worldwide total revenues of $425.2 million in 2023, up 5.0% year over year. Adjusted loss per share for 2023 was $2.56 against the earnings per share (EPS) of 8 cents year over year.
Quarterly Highlights
In the quarter under review, international revenues were $14.7 million, up 4.0% year over year on a reported basis and flat at constant exchange rate (CER).
U.S. revenues for the quarter totaled $101.5 million, up 2.0% year over year.
Total U.S. permanent implant procedures increased 3%, while U.S. trial procedures decreased 1%. U.S. PDN trial procedures, representing approximately 24% of total U.S. trial volume, jumped 17% from the prior-year quarter.
Margin Trend
In the quarter under review, Nevro’s gross profit rose 8.3% to $81.5 million. The gross margin increased 400 basis points to 70.1%.
Sales, general & administrative expenses remained almost flat at $80.6 million. Research and development expenses decreased 10.9% year over year to $12.4 million. Total operating expenses of $93.3 million decreased 1.4% year over year. The decrease in operating expenses was primarily due to reduced marketing, development, and outside consulting expenses, which were partially offset by increased legal costs.
Additionally, the fourth quarter included $3.0 million in one-time expenses related to the Vyrsa acquisition.
The total operating loss in the reported quarter was $11.8 million compared with $19.4 million in the year-ago quarter.
Financial Position
Nevro exited the fourth quarter of 2023 with cash and cash equivalents and short-term investments of $322.7 million compared with $320.3 million at the end of the third quarter. Long-term debt at the end of fourth-quarter 2023 was $211.5 million compared with $186.9 million at the third-quarter end.
As of Dec 31, 2023, 37,044,390 shares were issued and 36,361,474 shares were outstanding.
Guidance
Nevro has provided its financial outlook for full-year and first-quarter 2024.
For the first quarter of 2024, Nevro expects its worldwide revenues to be in the range of $97 million-$99 million, reflecting growth of 1-3% year over year on a reported basis as well at CER. The Zacks Consensus Estimate is pegged at $97.2 million.
The company expects its 2024 worldwide revenues to be in the range of $435 million-$445 million, reflecting growth of 2-5% from the comparable figure of 2023 both on a reported basis and at CER. The Zacks Consensus Estimate is pegged at $444 million.
Our Take
Nevro exited the fourth quarter of 2023 with better-than-expected results and an improvement in revenues, which surpassed its consensus estimate. The company’s robust domestic revenues were also impressive. An uptick was observed in total U.S. permanent implant procedures, while the U.S. trial procedures declined 1%. The improvement in U.S. PDN trial procedures was also encouraging.
The gross margin improved for the company with the lowering of operating expenses. However, loss at the operating level persisted for the company.
In the fourth quarter, Nevro acquired Vyrsa Technologies (Vyrsa), a medical technology company focused on a minimally invasive treatment option for patients suffering from chronic sacroiliac joint (SI joint) pain.
The company also closed a six-year, $200 million term loan credit facility, the proceeds of which were used to repurchase the majority of the company’s 2025 Convertible Notes, the acquisition of Vyrsa and for working capital and other general corporate purposes.
In January 2024, Nevro implemented restructuring, including laying off 5% of its workforce, a vast majority of which affected internally focused employees and non-customer-facing personnel in the field to support the company’s long-term growth and profitability.
Nevro Corp. Price, Consensus and EPS Surprise
Nevro Corp. price-consensus-eps-surprise-chart | Nevro Corp. Quote
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 Cencora, Inc. (COR - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
Cencora, carrying a Zacks Rank of 2 (Buy), reported first-quarter fiscal 2024 adjusted EPS of $3.28, beating the Zacks Consensus Estimate by 14.7%. Revenues of $72.25 billion outpaced the consensus mark by 5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cencora has a long-term estimated growth rate of 8.6%. COR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.7%.
Elevance Health reported fourth-quarter 2023 adjusted EPS of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
Cardinal Health reported second-quarter fiscal 2024 adjusted EPS of $1.82, beating the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion surpassed the Zacks Consensus Estimate by 1.1%. It currently carries a Zacks Rank #2.
Cardinal Health has a long-term estimated growth rate of 15.9%. CAH’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 15.6%.