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Reasons to Add ShockWave Medical (SWAV) to Your Portfolio Now
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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 Zacks Rank #2 (Buy) company have risen 70.9% year to date compared with the industry’s 8.8% growth. The S&P 500 Index has increased 10% in the same time frame.
With a market capitalization of $12.18 billion, this medical device company is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated.
ShockWave Medical’s earnings yield of 1.5% compares favorably with the industry’s (5.3%). Its earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 13.55%.
Image Source: Zacks Investment Research
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 fourth quarter of 2023, the company incurred R&D expenses of $42.3 million, up 78.4% from the prior-year quarter’s level.
For 2024, revenues are expected to grow 25-27% year over year to the range of $910-$930 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 strong demand in the international market, the launch of the same in the United States looks promising. This is due to the technology’s impressive 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 that for MS-DRG for other Percutaneous Coronary Intervention procedures.
Again, the CMS has established a Category I Current Procedural Terminology add-on code for procedures involving coronary IVL. 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.
Meanwhile, the stock has been surging recently on rumors of a potential acquisition offer from medical giant Johnson & Johnson. An offer may include a premium on the market price for SWAV’s share, thereby benefiting investors.
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 2024 revenues is pegged at $920.9 million, indicating an improvement of 26.1% from the previous year’s reported figure. The same for 2024 adjusted earnings per share is pinned at $4.89.
Some other top-ranked stocks in the broader medical space areDaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 35.6%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 31.8% year to date compared with the industry’s 9.9% growth.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.9%. CAH’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.
Cardinal Health’s shares have risen 11% year to date compared with the industry’s 7.3% growth.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.5%.
Integer Holdings’ shares have rallied 17.8% year to date compared with the industry’s 8.8% growth.
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Reasons to Add ShockWave Medical (SWAV) to Your Portfolio Now
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 Zacks Rank #2 (Buy) company have risen 70.9% year to date compared with the industry’s 8.8% growth. The S&P 500 Index has increased 10% in the same time frame.
With a market capitalization of $12.18 billion, this medical device company is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated.
ShockWave Medical’s earnings yield of 1.5% compares favorably with the industry’s (5.3%). Its earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 13.55%.
Image Source: Zacks Investment Research
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 fourth quarter of 2023, the company incurred R&D expenses of $42.3 million, up 78.4% from the prior-year quarter’s level.
For 2024, revenues are expected to grow 25-27% year over year to the range of $910-$930 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 strong demand in the international market, the launch of the same in the United States looks promising. This is due to the technology’s impressive 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 that for MS-DRG for other Percutaneous Coronary Intervention procedures.
Again, the CMS has established a Category I Current Procedural Terminology add-on code for procedures involving coronary IVL. 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.
Meanwhile, the stock has been surging recently on rumors of a potential acquisition offer from medical giant Johnson & Johnson. An offer may include a premium on the market price for SWAV’s share, thereby benefiting investors.
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 2024 revenues is pegged at $920.9 million, indicating an improvement of 26.1% from the previous year’s reported figure. The same for 2024 adjusted earnings per share is pinned at $4.89.
ShockWave Medical, Inc. Price
ShockWave Medical, Inc. price | ShockWave Medical, Inc. Quote
Other Stocks to Consider
Some other top-ranked stocks in the broader medical space areDaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 35.6%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 31.8% year to date compared with the industry’s 9.9% growth.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.9%. CAH’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.
Cardinal Health’s shares have risen 11% year to date compared with the industry’s 7.3% growth.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.5%.
Integer Holdings’ shares have rallied 17.8% year to date compared with the industry’s 8.8% growth.