Cardiovascular Systems, Inc.
’s
CSII
firm position in the Coronary Arterial Disease (CAD) as well as Peripheral Arterial Disease (PAD) markets, positive study results highlighting its effective technologies, impressive portfolio expansion and strong solvency position buoy optimism. Yet, the company has been incurring net losses for a long period of time, which is concerning. The stock currently has a Zacks Rank #3 (Hold).
Cardiovascular Systems’ coronary franchise registered strong performance globally on continued strength in Japan and the growing adoption of coronary OAS in Europe. Specifically, worldwide coronary revenues increased 10% with a 2% rise in the United States, driven by the continued adoption of coronary support products despite a 2% decline in coronary OAS procedures. Outside the United States, coronary revenues increased to $3.2 million from the year-ago period as a result of continued strength in Japan, combined with the growing adoption of coronary OAS in Europe. In Japan, the company currently has 44% of the market share.
In the fiscal first quarter, the company sold $756 of support products for every coronary OAS sold. The quarter-over-quarter increase shows the strong resilience of the company’s ISPs even when coronary procedures modestly declined. Further, recent agreements have enabled Cardiovascular Systems’ representatives’ access to sell its ISP portfolio in over 50% of the U.S. health system. In total, sales of coronary support products were $2.7 million in the reported quarter. The company also certified 80 new coronary users in the quarter internationally, consistent with the prior quarters.
Cardiovascular Systems, Inc. Price
Cardiovascular Systems, Inc. price
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Cardiovascular Systems, Inc. Quote
The company’s fiscal first-quarter international revenues increased 94% year over year led by COVID-19 rebound, new account growth in Japan and the continued strong adoption of Diamondback 360 Coronary OAS in the EU contributed to strong international results. The company continues to experience strong demand for physician training and certification in all international markets. During the reported quarter, the company certified nearly 80 coronary interventionalists outside the United States, exclusively using remote training and case support.
In the fiscal second quarter, Cardiovascular Systems expects to resume sequential growth. This quarter, the company will continue the training of new PAD accounts and new users to deepen penetration in large hospital systems and OBL. It also plans to initiate the full commercial launch of the Viper cross peripheral catheter in Q2.
On the flip side, Cardiovascular Systems’ first quarter of fiscal 2021 loss was wider than the year-ago figure and the Zacks Consensus Estimate. The company’s revenues too lagged the consensus mark and dropped on a year-over-year basis. Peripheral revenues registered a significant decline in the reported quarter.
According to the company, the resurgence of COVID-19 and the related staffing shortages disrupted referral patterns and had the largest impact on more elective procedures like treatment with lower acuity peripheral claudication. Cardiovascular Systems noted that the severity and duration of the COVID-19 impact were greater than expected and more pronounced due to the timing and geographic location of the Delta surge.
On the profitability front, Cardiovascular Systems bears a long history of incurring net losses since its inception in 1989 and although it had generated a net profit of $1.7 million in fiscal 2018, sustainability is a matter of question. In fiscal 2021, the company reported a net loss of $13.4 million. In fiscal 2020 and 2019, the company reported net losses of $27.2 million and $0.3 million, respectively. In the first quarter of fiscal 2022 as well, the situation remained unchanged, with the company reporting 22 cents of net loss per share.
Over the past three months, Cardiovascular Systems has underperformed the
industry
. The stock has declined 43.8% compared with the industry’s 4.1% fall.
Key Picks
A few better-ranked stocks in the broader medical space include
AMN Healthcare Services, Inc.
AMN
,
Apollo Endosurgery, Inc.
APEN
and
Patterson Companies, Inc.
PDCO
.
AMN Healthcare, carrying a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 16.2%. The company’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.
AMN Healthcare has outperformed its industry over the past year. AMN has gained 48.3% against the 57.3% industry decline.
Apollo Endosurgery, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 7%. The company‘s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 25.6%, on average. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Apollo Endosurgery has outperformed its industry in the past year. APEN has gained 103.3% versus the industry’s 1% fall.
Patterson Companies, carrying a Zacks Rank #2, has a long-term earnings growth rate of 9.9%. The company surpassed earnings estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 3.7%.
Patterson Companies has underperformed its industry over the past year. PDCO has declined 11.1% versus the industry’s 4.9% rise.
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