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Analyst Blog

Share price of Nevro Corp (NVRO - Free Report) rallied to a new 52-week high of $102.66 on Sep 23, eventually closing a bit lower at $102. This represents a stellar one-year return of approximately 108%, better than the S&P 500’s 12% over the same period. In fact since the last earnings release of second-quarter of fiscal 2016 on Aug 8, the company’s share price rallied a massive 26% till yesterday’s close.

Currently, Nevro carries a Zacks Rank #3 (Hold). Notably, the stock has a market cap of $2.91 billion.

Catalysts

Strong adoption trends of HF10 therapy platform is a key catalyst. The platform represents a notable 13% of the global spinal cord simulation industry. In fact, the HF10 platform has successfully captured more than 10% of the U.S. market within a year of its launch.

In fact, leading health insurers like Aetna, Humana, Kaiser and CMS have updated their coverage policies to include HF10 therapy. Additionally, Neurosurgery, the official Journal of the Congress of Neurological Surgeons has accepted a publication from Nevro that rates HF10 therapy in terms of ‘superior efficacy’ and ‘durability of outcomes’.

Nevro reported an impressive second quarter of fiscal 2016 recently, beating the Zacks Consensus Estimate on both the lines. The company posted sales of $55.4 million (up 385% year over year) in the quarter. The company is also well poised internationally, with sales of $14.8 million reflecting an increase of 30% from the year-ago quarter, courtesy of solid sales growth in Europe and Australia.

NEVRO CORP Price and Consensus

 

NEVRO CORP Price and Consensus | NEVRO CORP Quote

Based on the robust performance as well as several recent strategic steps, the company upgraded its fiscal 2016 guidance boosting our confidence on the stock. Nevro expects sales in the band of $210 million to $220 million, an increase of $35 million from the full-year guidance issued on May 9.

Estimate Revisions

The Zacks Consensus Estimate for fiscal 2016 increased by 27 cents, forecasting a loss of $1.40, as four out of seven analysts upgraded their estimates in the last two months.

Key Picks

Better-ranked stocks in the broader medical sector include Halyard Health Inc. (HYH - Free Report) , Straumann Holding AG (SAUHF - Free Report) and ABIOMED Inc. (ABMD - Free Report) .

Halyard currently sports a Zacks Rank #1 (Strong Buy). We note that the company posted a positive earnings surprise in the last four quarters, with an average of 25.8%. Meanwhile, a glimpse at the share price reveals an impressive one-year return of 15.8%, better than the S&P 500’s 12% over the same time frame.

Straumann, a global leader in implant and restorative dentistry and oral tissue regeneration, also carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.This stock has an impressive long-term expected earnings growth rate of 13%. Straumann represents a solid one-year return of 34.1%.

ABIOMED carries a Zacks Rank #2 (Buy). The company posted a positive earnings surprise for the last four quarters of 34.9%. This stock has an impressive long-term expected earnings growth rate of 26.6%.

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