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Why Is Cardiovascular Systems (CSII) Up 10.8% Since Last Earnings Report?

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A month has gone by since the last earnings report for Cardiovascular Systems (CSII - Free Report) . Shares have added about 10.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cardiovascular Systems due for a pullback? 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 catalysts.

Cardiovascular Systems Gains Ground on Overall Growth in Q1

Cardiovascular Systemsreported loss per share of 9 cents in first-quarter fiscal 2019 compared with the year-ago loss of 6 cents.

The reported figure was wider than the Zacks Consensus Estimate of a loss of 6 cents.

Net Sales

Cardiovascular Systems recorded revenues of $56.3 million in the fiscal first quarter, marking a 13.3% year-over-year increase. The top line steered past the Zacks Consensus Estimate by 0.6%.

Segment Details

Coronary device revenues increased over 30% year over year to $15 million. Meanwhile, peripheral device revenues rose 8% to $41.2 million on a year-over-year basis. The company continued to see strong adoption of its Orbital Atherectomy System (OAS). Also, Cardiovascular Systems is progressing well with its objective to introduce OAS globally.

Margin

Gross margin in the reported quarter was 81.2%, down 30 basis points (bps) year over year due to the full-market launch of coronary balloons and peripheral guidewires along with rising revenues from international distributors.

Meanwhile, selling and administrative (SG&A) expenses rose 14.8% to $41.2 million and research and development (R&D) expenses were up 17.6% to $7.4 million. As a result, adjusted operating expenses rose 15.4% to $48.7million.

Loss from operations came in at around $3 million, compared with a loss of $1.8 million in the year-ago period.

Financial position

The company exited first-quarter fiscal 2019 with cash and cash equivalents of $113.4 million, compared with $116.3 million at the end of fiscal 2018.

Outlook

Cardiovascular Systems reiterated its fiscal 2019 guidance. The company expects revenues in the range of $240-$250 million for fiscal 2019. The current Zacks Consensus Estimate for fiscal 2019 revenues is pegged at $244.2 million, within the company's guidance.

Moreover, the company expects gross profit to account for 80% of revenues in fiscal 2019.

The company expects to incur net loss of 1-2% of revenues in fiscal 2019. The current Zacks Consensus Estimate is pegged at a loss of 10 cents.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months. The consensus estimate has shifted -20% due to these changes.

VGM Scores

Currently, Cardiovascular Systems has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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

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




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