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Inari Medical (NARI) Q4 Earnings Improve Y/Y, Gross Margin Down
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Inari Medical, Inc. (NARI - Free Report) reported adjusted earnings per share (EPS) of 5 cents in the fourth quarter of 2023 against the year-ago period’s loss of 11 cents per share. The Zacks Consensus Estimate for EPS was pegged at 1 cent. On a GAAP basis, the company recorded a loss per share of 8 cents. There was no adjustment in the prior-year period.
Revenues in Detail
Inari Medical registered revenues of $132.1 million in the fourth quarter, up 22.6% year over year. The figure matched with the Zacks Consensus Estimate.
Full-Year Results
Inari recorded total revenues of $493.6 million in 2023, up 28.7% year over year. In 2023, the loss per share was 3 cents compared with 55 cents per share in the prior year.
Q4 Highlights
During the reported quarter, NARI completed its acquisition of LimFlow. This system allows for the transcatheter arterialization of the deep veins and is indicated to treat patients with chronic limb-threatening ischemia.
On the fourth-quarter earnings call, management also continued to make progress across the six products that are in full market release in the second half of 2023. Three of these products, REVCORE, InThrill and ProTrieve, add direct incremental revenue opportunities. Management also confirmed gaining good initial traction and is receiving excellent clinical feedback across all three products.
Per management, Inari Medical witnessed another quarter of record case and revenue production outside of the United States. Its performance was driven primarily by increased adoption in Western Europe, complemented by solid case growth in its early-stage markets in Latin America, Canada and the Asia-Pacific. The company continues to make good progress in both China and Japan and anticipates beginning to treat patients in both these markets in 2024. Management expects its international business could represent more than 20% of total revenues over time on the back of unmet needs.
Margin Trend
In the quarter under review, Inari Medical’s gross profit improved 21.6% to $115.1 million. The gross margin contracted 70 basis points (bps) to 87.1%.
Selling, general and administrative expenses rose 26.7% to $101.5 million. Research and development expenses increased 12.1% year over year to $22.9 million. The operating expenses of $124.4 million increased 23.7% year over year.
The operating loss totaled $9.3 million compared with the operating loss of $5.9 million in the year-ago period. Excluding acquisition-related costs of $7.7 million and acquired intangible asset amortization of $1.3 million, adjusted operating loss during the quarter was $0.3 million.
Financial Position
Inari Medical exited fourth-quarter 2023 with cash and cash equivalents and short-term investments of $116.1 million compared with $351.3 million at the end of the third quarter.
Cumulative net cash provided by operating activities at the end of fourth-quarter 2023 was $35.9 million against cumulative net cash used in operating activities of $14 million in 2022.
Guidance
Inari Medical has issued its financial outlook for 2024.
For 2024, the company expects revenues in the range of $580 million-$595 million, reflecting growth of 17.5%-20.5% in 2023. The Zacks Consensus Estimate stands at $589.9 million.
Our Take
Inari Medical exited the fourth quarter of 2023 with better-than-expected results. The uptick in overall revenues was impressive. The company continued to make impressive progress in its product portfolio, which resulted in robust product adoption by its customers. Geographical performances were also impressive. The gross margin expansion bodes well for the stock.
However, Inari Medical’s lower gross margin and dismal bottom-line performances were disappointing. The company incurred an operating loss during the quarter, which raises our apprehension.
Inari Medical, Inc. Price, Consensus and EPS Surprise
Inari Medical 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%.
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Inari Medical (NARI) Q4 Earnings Improve Y/Y, Gross Margin Down
Inari Medical, Inc. (NARI - Free Report) reported adjusted earnings per share (EPS) of 5 cents in the fourth quarter of 2023 against the year-ago period’s loss of 11 cents per share. The Zacks Consensus Estimate for EPS was pegged at 1 cent. On a GAAP basis, the company recorded a loss per share of 8 cents. There was no adjustment in the prior-year period.
Revenues in Detail
Inari Medical registered revenues of $132.1 million in the fourth quarter, up 22.6% year over year. The figure matched with the Zacks Consensus Estimate.
Full-Year Results
Inari recorded total revenues of $493.6 million in 2023, up 28.7% year over year. In 2023, the loss per share was 3 cents compared with 55 cents per share in the prior year.
Q4 Highlights
During the reported quarter, NARI completed its acquisition of LimFlow. This system allows for the transcatheter arterialization of the deep veins and is indicated to treat patients with chronic limb-threatening ischemia.
On the fourth-quarter earnings call, management also continued to make progress across the six products that are in full market release in the second half of 2023. Three of these products, REVCORE, InThrill and ProTrieve, add direct incremental revenue opportunities. Management also confirmed gaining good initial traction and is receiving excellent clinical feedback across all three products.
Per management, Inari Medical witnessed another quarter of record case and revenue production outside of the United States. Its performance was driven primarily by increased adoption in Western Europe, complemented by solid case growth in its early-stage markets in Latin America, Canada and the Asia-Pacific. The company continues to make good progress in both China and Japan and anticipates beginning to treat patients in both these markets in 2024. Management expects its international business could represent more than 20% of total revenues over time on the back of unmet needs.
Margin Trend
In the quarter under review, Inari Medical’s gross profit improved 21.6% to $115.1 million. The gross margin contracted 70 basis points (bps) to 87.1%.
Selling, general and administrative expenses rose 26.7% to $101.5 million. Research and development expenses increased 12.1% year over year to $22.9 million. The operating expenses of $124.4 million increased 23.7% year over year.
The operating loss totaled $9.3 million compared with the operating loss of $5.9 million in the year-ago period. Excluding acquisition-related costs of $7.7 million and acquired intangible asset amortization of $1.3 million, adjusted operating loss during the quarter was $0.3 million.
Financial Position
Inari Medical exited fourth-quarter 2023 with cash and cash equivalents and short-term investments of $116.1 million compared with $351.3 million at the end of the third quarter.
Cumulative net cash provided by operating activities at the end of fourth-quarter 2023 was $35.9 million against cumulative net cash used in operating activities of $14 million in 2022.
Guidance
Inari Medical has issued its financial outlook for 2024.
For 2024, the company expects revenues in the range of $580 million-$595 million, reflecting growth of 17.5%-20.5% in 2023. The Zacks Consensus Estimate stands at $589.9 million.
Our Take
Inari Medical exited the fourth quarter of 2023 with better-than-expected results. The uptick in overall revenues was impressive. The company continued to make impressive progress in its product portfolio, which resulted in robust product adoption by its customers. Geographical performances were also impressive. The gross margin expansion bodes well for the stock.
However, Inari Medical’s lower gross margin and dismal bottom-line performances were disappointing. The company incurred an operating loss during the quarter, which raises our apprehension.
Inari Medical, Inc. Price, Consensus and EPS Surprise
Inari Medical, Inc. price-consensus-eps-surprise-chart | Inari Medical, Inc. Quote
Zacks Rank and Key Picks
Inari Medical 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%.