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Nevro (NVRO) Down 3.6% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Nevro (NVRO - Free Report) . Shares have lost about 3.6% in that time frame, underperforming the S&P 500.

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

Nevro Q1 Loss Wider Than Expected, Revenues Down Y/Y

Nevro reported first-quarter 2019 loss of $1.45 per share, wider than the Zacks Consensus Estimate of a loss of 66 cents. The company incurred a loss per share of 59 cents in the year-ago quarter.

The company posted revenues of $82.1 million, missing the Zacks Consensus Estimate by 6.1%. Revenues dropped 6.3% year over year.

Quarter Highlights

In the quarter under review, international revenues were $16.3 million, down 4% year over year but up 4% at constant currency (cc).

U.S. revenues for the quarter totaled $65.8 million, reflecting a 7% year-over-year drop. The decrease was due to the company’s decision to diminish the impact of high-volume product orders in the quarter.

Margins

Gross profit totaled $53.2 million, down 14.2% year over year. Gross margin was 64.8%, down 590 basis points.

Operating expenses rose 22.6% year over year to $95.5 million. Research and development expenses totaled $14.1 million, up 27.5% year over year.
Sales, general and administrative expenses were up 22.1% year over year to $81.3 million.

Guidance

Nevro expects second-quarter 2019 worldwide revenue in the $87-$89 million range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -56.64% due to these changes.

VGM Scores

Currently, Nevro has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Nevro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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