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AngioDynamics (ANGO) Down 6.9% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for AngioDynamics (ANGO - Free Report) . Shares have lost about 6.9% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is AngioDynamics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

AngioDynamics Q1 Earnings Miss, FY19 Sales View Raised

AngioDynamics reported first-quarter fiscal 2019 adjusted earnings of 16 cents per share, which missed the Zacks Consensus Estimate by 2 cents. However, earnings improved 23.1% from the prior-year quarter.

Net sales came in at $85.3 million, which edged past the Zacks Consensus Estimate of $83 million. However, revenues declined 0.1% year over year.

Geographical Analysis

U.S. net revenues in the quarter under review were $67.7 million, down 1.8% at constant currency (cc).

International revenues totaled $17.7 million, up 7.3% at cc. Per management, the company’s NanoKnife saw rising global adoption in the reported quarter.

Segmental Analysis

Vascular Interventions and Therapies (VIT) Business

VIT sales in the quarter grossed $50 million, up marginally from the year-ago quarter’s $49.9 million. Per management, growth in Fluid Management, Angiographic Catheters and AngioVac was offset by declines in the Venous Insufficiency business.

However, AngioVac procedural volume growth remained strong, with procedures increasing 16% year over year.

Vascular Access (VA) Business

Revenues at this segment came in at $23.8 million, up 2.4% on a year-over-year basis. Per management, growth in Ports, Dialysis and Midline products was partially offset by a decline in PICC sales.

Oncology/Surgery Business

Oncology sales fell 6.1% year over year to $11.6 million as NanoKnife disposable growth was more than offset by decline in sales of Radiofrequency Ablation and Microwave products. Per management, the segment was impacted by the timing of the prior-year Acculis Microwave Ablation system market withdrawal.

Excluding the impact of transition from the company’s Acculis Microwave product to its Solero Microwave product, its Oncology business grew 7.5% year over year.

Margin Analysis

In the quarter under review, gross profit totaled $44.5 million, up 7.9% from the year-ago quarter. Gross margin was 52.1%, up 380 basis points (bps).
Adjusted operating income totaled $8.9 million, up 15.4% year over year. Adjusted operating margin was 10.4%, up 170 bps year over year.

Guidance

AngioDynamics raised its fiscal 2019 sales guidance and retained its earnings per share view.

The company projects sales within $354-$359 million.

Adjusted earnings per share are expected in the range of 82-86 cents.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

At this time, AngioDynamics has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

AngioDynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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